Skipton and Scarborough to merge

Skipton BS

Skipton and Scarborough building societies have announced plans to merge early next year, creating the fifth biggest society in the UK.

The merger is the latest in a series announced by the mutual sector, as building societies take stock of the current financial turmoil and uncertain climate. Nationwide is taking Derbyshire and Cheshire into its fold, Chelsea recently merged with the Catholic, Britannia has revealed it is looking at merging with the Co-Operative and, most recently, the Barnsley was forced to go cap-in-hand to the Yorkshire after investing in Icelandic banks.

The Scarborough, currently the 17th biggest building society in the UK, says it approached the Skipton, the 6th biggest, after the current difficult trading conditions lead to a “substantial impact on profit”. It was also concerned that the impact of house price falls and impending recession could cause an “unacceptable” reduction in its financial resources.

The enlarged society will keep the Skipton name, and is estimated to have 860,000 members and over £16bn of assets..

John Goodfellow, chief executive of the Skipton, says: “By joining forces, these two societies will create a significant force in the building society sector - a modern mutual that is set to grow further in the years to come.”

“There are benefits for both sets of members, who can look forward to a continued relationship with a building society that puts their long-term interests at the heart of what it does.”

Impact on customers

* All Scarborough borrowers currently making payments at or linked to Scarborough's standard variable rate (SVR) will be moved onto Skipton’s lower SVR.

* All savings customers will be given similar, or better, terms and interest rates to those enjoyed prior to the merger.

* There will be no financial payouts to any members of the societies as a result of the merger.

* The enlarged Skipton Building Society will keep a branch presence in all towns where Scarborough is currently represented.