Yorkshire BS announces takeover of N&P

Yorkshire BS

Yorkshire Building Society has announced details of its takeover of Norwich & Peterborough Building Society.

Subject to approval from both organisations and the FSA, the combined society will operate under Yorkshire Building Society, with N&P remaining a separate brand.

Details of the merger come just days after N&P was fined £1.4 million by the FSA for the mis-selling of Keydata products. It has also promised to compensate customers a total of £51 million.

Expected to complete in November, the enlarged society will have 224 branches and three million members. The YBS brand will continue to offer its traditional stable of residential mortgages and savings.

Under the Financial Services Compensation Scheme rules, savers are limited to a deposit protection allowance of £85,000 per individual per banking group. This means that if the merger goes ahead a saver with £50,000 in N&P and £50,000 in YBS will only receive £85,000 in compensation, not their full £100,000, should the building society fail.

Commenting on the merger, Iain Cornish, chief executive of the YBS, says: "We will build on N&P's strong brand and the value it has delivered to its members, while gaining the opportunity to consider developing our own products in areas where N&P has complementary capabilities and expertise, such as the current account market."

This article was written for our sister site Money Observer