According to press releases on both their websites, the Skipton Building Society and the Scarborough Building Society have today announced plans to merge. Skipton currently the UK’s 6th largest society will merge with Scarborough the 17th largest society. The newly merged society will be called Skipton.
This is the latest in a series of small society boards deciding that they are too small to effectively weather the current financial crisis. There are no specific details about nor any reason to believe that the Scarborough was in any immediate danger of collapse. Indeed, this merger again shows how mutuals are able to look after their own, protecting themselves and their members from the harsh externalities of today’s economy.
The merger will not require a membership vote and should be complete in the next few months. There will be no dividend payouts to members, though the Skipton has pointed out that it has a lower standard variable rate than the Scarborough potentially saving money for those with mortgages.
Skipton has also indicated that there won’t be any savage cost cutting exercises, and importantly for the local economy of Scarborough, their purpose built head office will remain open and branches will be re-branded. However it is logical to assume that jobs may be at risk where branch networks overlap.
Building society mergers are likely to continue over the near future. It should be remembered that societies have always merged with one another even during boom times – Leeds & Mercantile in 2006 for example. While consolidation continues in the building society sector perhaps we should question why there have been no new societies set up since 1966, when the afore mentioned Mercantile and Teachers were established.
Filed under: General | Tagged: Building Society merger, Leeds Building Society, Mercantile Building Society, Merger, mortgages, Scarborough Building Society, Skipton Building Society, Teachers Building Society
