Skipton Building Society and Scarborough Building Society have announced that they will be merging in the face of "difficult trading conditions" which have resulted in a "substantial impact on profits".
The boards of the two building societies have released a joint statement which explains how the merger is an "opportunity" for the North Yorkshire based mutuals to create a stronger society which is better placed to deal with future problems in the financial marketplace.
They are well-matched, the statement said, because they share similar business models, "a strong geographical fit and shared commitment to mutuality, their members and their local communities."
Scarborough approached Skipton in order to protect itself from worsening economic conditions in the future, such as the continuing fall of house prices, and, like the rest of the banking sector, the reduced mortgage
applications and approvals.
Scarborough will become part of Skipton Building Society and will be known as such.
It is predicted that the enlarged Skipton Building Society is set to enter the top five largest building societies
as a result of the merger, with a collective 860,000 and more than £16billion of assets.
"I am delighted that the societies are merging and this is beneficial to members." said John Goodfellow, chief executive of Skipton Building Society
. "By joining forces, these two societies will create a significant force in the building society sector - a modern mutual that is set to grow further in the years to come."
John Carrier, chief executive of Scarborough Building Society
, added: "We believe this merger is in the long-term best interests of our members, our people and our local community, and can only serve to enhance the building society sector."
© Fair Investment