Skipton Building Society has revealed it is to merge with rival Chesham Building Society, as it announces pre-tax profits of £63.5m, up £41.0m on last year’s £22.5m.
The enlarged society will have over £15bn of assets and a 92-strong branch network.
Subject to confirmation by the Financial Services Authority and approval by Chesham members, the merger is expected to become effective on 1 June 2010.
Chesham already has a working relationship with Skipton as it uses an IT platform provided by a subsidiary within the Skipton Group. As well as providing three new branches for members, the merger will further improve Skipton’s capital position.
Skipton have committed to retaining Chesham’s three branches for 12 months from the date of merger, after which they will be subject to the society’s ongoing branch review process.
There will also be no compulsory redundancies among branch staff as a result of the merger.
David Cutter, group chief executive of Skipton, says: “We have always made it clear that we would consider further merger activity where it is in the best interests of our members. We look forward to welcoming Chesham’s members on board and believe this union will provide positive product and service benefits for the combined customer base of the enlarged society.”
Skipton’s results show its group mortgage assets increased by £1.3bn to £10.7bn in 2009, mainly as a result of the Scarborough merger.
With group pre-tax profit from continuing operations up £0.1m to £18.0m, compared to £17.9m in 2008.
Core Tier One capital ratio was up 9% to 9.4%, compared to 8.6% in 2008, while Tier One capital ratio increased to 10.8%, from 9% in 2008.
Retail balances increased by £2.3bn, or 29%, to £10.5bn. With saving membership up by 145,000 to 700,000, with 79% of funding now coming from retail balances, compared to 69% in 2008.
The merger with Scarborough Building Society completed on 30 March 2009, boosting the society’s assets by £2.6bn at that date.