The boards of Skipton and Scarborough Building Societies announced this week that they are to merge, and expect the deal to complete in the first quarter of 2009.
Both lenders were founded in the 1800’s, but Skipton, the 6th largest building society, is by far the dominant party with more than 3 times the number of members, and almost 5 times the assets.
Continuing market difficulties have led to a number of mergers this year, aimed at providing the new larger lender and their members, with a stronger base from which to withstand the ongoing downturn.
Scarborough borrowers either on, or linked to their standard variable rate (SVR), could benefit as once the merger is completed, they will switch to Skipton’s SVR which is currently 0.79% lower, although there is no guarantee that this margin will continue. In addition, all Scarborough savings accounts “will be on similar or better terms and interest rates” once the larger lender is formed.
Members of the societies will not be required to vote on the proposal, and in order to protect reserves, the merger will not involve any windfall.
Other mergers announced this year:
Chelsea and Catholic Building Societies. Nationwide, Cheshire and Derbyshire Building Societies. Yorkshire and Barnsley Building Societies.