Two building societies to merge
November 19, 2008 by admin
Filed under News, News-Banking
It has recently been revealed that two building societies, the Yorkshire and the Barnsley Building Societies, are to merge, with the larger Yorkshire building Society agreeing to the merger with its smaller rival in a form of rescue bid. This is one of a number of recent mergers and takeovers in the world of banking in the UK. The smaller building society, Barnsley, approached its rival with a view to a merger after losing a possible £10 million in the Icelandic bank collapse.
Officials from the Barnsley said that reserve funds could have been used to fill the gap left by the financial loss, but decided to approach the Yorkshire with a view to merging because it wanted to try and ensure financial stability over the longer term. It is thought that the merger will have been completed by the end of December, but officials from the building societies have warned that members of either society will not receive any windfall payment as a result of the merger.
It was reported that some Barnsley members may receive some form of payment at a later date, although nothing has been guaranteed. The Yorkshire Building Society will be pursuing recovery of the lost funds from Icelandic bank, Kaupthing Edge, once the merger has been completed.
In addition, Yorkshire has said that it will ensure that Barnsley customers received an interest rate that was the same or better than they are receiving at the moment.
Barnsley, like many other companies and charities, has lost a huge sum of money due to the Icelandic bank collapse. One official from the building society said: ‘The board has been consistent in pro-actively managing its exposure to the financial markets by spreading risk across a variety of institutions and countries.’
