Chelsea and Yorkshire building societies this week have formally announced plans for a merger that will be second in size only to the Nationwide as a customer-owned lender.
The proposed merge would create a lender with £35 billion of assets but will lead to hundreds of redundancies too.
Yorkshire boss Iain Cornish is set to run the merged operation. Although there have been talks that this is to ‘rescue’ the smaller Chelsea having fallen victim to mortgage fraud, this is denied by Cornish’s counterpart at Chelsea, Stuart Bernau.
If the merge goes ahead, Chelsea will retain its brand although the group will be under the name Yorkshire Building Society and will have almost 3 million members and 178 branches.
The question on many people’s lips is ‘Will I get money from the Chelsea and Yorkshire merger?’ and unfortunately that answer is no.
Previous mergers between building societies have not paid out recently because it is claimed the mergers were in the members’ best interests, and it seems the same reason is being given here, although Chelsea insists that it could continue alone for some time so it is not an emergency rescue takeover. Yorkshire is taking on around £200 million of debt from Chelsea so there are reportedly no funds to be distributed amongst members.
The vote on the decision for the merge will go ahead in January in two special general meetings. A decision either way should not affect mortgages held with either bulding society.
