Yorkshire Building Society and Barnsley Building Society have released a joint statement today announcing that they are to merge.
After identifying potential losses from exposure to collapsed Icelandic banks, Barnsley approached the much larger YBS to seek a merger, bringing together a shared commitment for "mutuality, staff and local communities". Yorkshire Building Society
is the third largest of the UK's building societies
, with more than 1.9 million members, total assets of more than £20billion, and says that it has a low-risk business model.
The Barnsley, on the other hand, ranks as just the 34th of the UK's largest societies, with assets of £376million, but boasts a strong mortgage
book and retail funding base. Barnsley Building Society
does, however, have exposure to two Icelandic banks, which could see a loss of as much as £10million, pushing its board members to see a stronger future for it under YBS.
The combined society will be called Yorkshire Building Society, but locally the Barnsley Building Society name and identity will be retained, as will all branches under its current brand.
"This merger is a further step in demonstrating the strength of the mutual sector in the UK, with complete certainty to customers maintained at no cost to the taxpayer." said Iain Cornish, chief executive of YBS.
"I am delighted that the Yorkshire’s strong financial position enables us to provide assurance to the members of the Barnsley, as well as preserving its local character.
"Yorkshire members will benefit from the Barnsley’s strong funding position and very high quality mortgage book, as well as strengthening even further our position in our heartland area."
Steve Mitchell, acting chief executive of Barnsley Building Society, explained that while the society "has been consistent in pro-actively managing its exposure to the financial markets by spreading risk", it could not have predicted the current global credit crisis.
The merger with YBS will "provide the very best in terms of financial stability and expected future benefits for our members". he said.
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