March 14 2014 Latest news:
By Shaun Lowthorpe
Sunday, March 6, 2011
Two East Anglian financial institutions could be about to join forces as part of a potential takeover deal.
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.