N&P has agreed terms of merger with Yorkshire
The Norwich & Peterborough Building Society could become a part of Yorkshire Building Society by November 1 this year, the boards of both institutions have announced this morning.
In a joint statement, both building societies said they had agreed terms of a proposed merger and that there were 'clear and compelling benefits for members of both societies'.
The N&P would become part of Yorkshire Building Society but retain its name and all N&P's branches will be maintained for a minimum of two years, it said.
Yorkshire's existing head office in Bradford will remain the head office of the enlarged society, it said, adding that 'an important operational presence will be retained in Peterborough for at least three years'.
It also said that Yorkshire will honour in full the compensation payments programme for holders of failed Keydata investment products previously announced by N&P.
Yorkshire Building Society is the UK's second largest building society with assets exceeding �30bn. N&P is the UK's ninth largest society with assets of �3.7bn.
The proposed merger will create an enlarged Society with 3 million members and 224 branches.
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It will be subject to final agreement by the boards of both societies, the approval of eligible members of N&P at a special general meeting and confirmation by the Financial Services Authority (FSA).
Gordon Horsfield, chairman of N&P, said: 'For many years N&P has been committed to putting its customers at the heart of everything we do, and we know from all their feedback that our way of doing this is warmly and loyally welcomed.
'The board concluded some time ago that to uphold this proposition [of putting customers at the heart of the business] for the longer term requires continued levels of investment in back office, branches, product pricing and range as well as to support training and development opportunities for our staff to help them keep delivering the service expected.
'The necessary resources for this continuing investment can only readily come from the economies of scale, organisational depth and financial strength associated with size. We also strongly believe that the values and culture associated with the mutual business model are the right ones for our market.
'The opportunity to merge with so highly a respected society as the Yorkshire, where these qualities are so evident, is one which is right for N&P. We particularly value their commitments to our members to maintain the branch network, their interest in and
concern for our staff, and the openmindedness and appreciation they have shown of our ideas, products and expertise where these are not presently offered by the Yorkshire, with a view to making them more widely available'.
The combined Society, which will be known as Yorkshire Building Society, will be focused on the traditional building society business of residential mortgages and savings and will be principally retail funded, the statement from both building societies said.
The proposed merger is expected to complete on November 1, this year.
The statement said the enlarged society would combine the Yorkshire's financial strength and merger experience with N&P's strong regional presence and membership in the east of England.
It said there was a good geographical fit of branch networks and provided an opportunity for growth.
It added: 'While the Yorkshire has invested substantially in its internet and telephone operations, its branch network remains at the heart of its organisation. It is therefore intended that a high street presence will be retained in all communities where either the Yorkshire or N&P currently have a branch, extending Yorkshire's national branch network.
'As part of this commitment, all N&P's existing branches will be maintained for a minimum of two years.'
Iain Cornish, chief executive of Yorkshire Building Society, said: 'N&P has similar values to the Yorkshire. It shares our commitment to mutuality and our determination to deliver longterm value and exceptional customer service to our members. 'Its traditional building society activities remain profitable and it is well regarded in the communities it serves in the east of England.
'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.'
The statement said the merger would not involve any distribution payments to either membership.
A special general meeting will be held for members of N&P on August 22 at which N&P members' approval to the proposed merger will be sought.
In July 2011 eligible members will receive a merger booklet setting out details of the merger proposal.