Two East Anglian financial institutions could be about to join forces as part of a potential takeover deal.

To send a link to this page to a friend, you must be logged in.

Speculation is mounting that Norwich based Virgin Money is in talks to buy the Norwich and Peterborough Building Society.

According to a national newspaper report both sides are in advanced talks about a possible buyout that could give Virgin access to the N&Ps network of 45 branches and 500,000 customer base.

Virgin Money has long held ambitions to move into High Street banking and a take over would sit well alongside its efforts to buy Northern Rock - giving it a high street presence across the country with around 100 branches.

Neither side would comment on the talks last night.

But back in December N&P bosses confirmed that it had received a number of “expressions of interest” from parties in connection with a possible merger or injection of new capital.

Yet Virgin is facing stiff competition to take over the N&P, which has been left reeling by the collapse of the Keydata Investment firm that threatened to leave hundreds of elderly investors out of pocket.

Though N&P stepped in to mitigate any shortfalls for investors until potential compensation deals could be finalised, around 400 people have complained to the Financial Services Ombudsman that they were mis-sold investments.

If their complaint is upheld N&P, which has already had its credit rating downgraded, could be forced to pay out millions of pounds in compensation.

About 3,100 N&P customers are thought to have savings caught up in Keydata, which went into administration in 2009 and is now being investigated by the Serious Fraud Office. Most invested between £5,000 and £100,000.

It is thought that American private equity group JC Flowers, which last year took over similar sized mutual Kent Reliance, made an informal takeover approach of N&P last year.

Co-operative Financial Services, and rival building societies including Yorkshire, Coventry, Leeds and Principality are also believed to be eyeing a possible bid.

1 comment

  • N&P would not demutulise. Do customers get any payouts or is this money going to pay Keydata!

    Report this comment

    Choice

    Sunday, March 6, 2011

ADVERTISEMENT

ADVERTISEMENT

Norfolk Weather

Partly Cloudy

Partly Cloudy

max temp: 11°C

min temp: 8°C

Five-day forecast

loading...

ADVERTISEMENT

ADVERTISEMENT