The Yorkshire and Chelsea building societies have announced plans to merge in a deal that will lead to job losses but no windfall for members.
The tie-up between the UK’s second and fifth largest building societies will create a major force in the mutual sector, with assets of £35 billion, 178 branches and 2.7 million members.
The groups claimed the deal was a strategic merger rather than a rescue of the Chelsea by its larger rival.
But there will be no windfall for members, as the enlarged group looks to conserve its cash, while the Yorkshire will be left nursing a £200 million writedown on Chelsea’s debt. The enlarged group will be known as the Yorkshire Building Society, although the Chelsea brand will be retained.
The combined group will follow the traditional building society model of offering savings accounts and residential mortgages, and will be primarily funded through customer deposits. It will make efficiency savings of £35 million, but there will be a “number of job losses”.
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