Skipton and Scarborough Building Societies to merge

by Gill Montia

Story link: Skipton and Scarborough Building Societies to merge

In the latest round of consolidation in the financial sector, Skipton Building Society and Scarborough Building Society have announced a merger.

The mutuals, both based in North Yorkshire, expect difficult trading conditions to have a substantial impact on profits and are choosing to join forces to weather out any future problems of the credit crisis.

The downturn in the UK housing market and a dramatic decline in mortgage lending (which for new purchases fell by an annual 57% in September) prompted Scarborough to approach its larger rival.

Following the merger, Scarborough will be absorbed by Skipton and its name will disappear.

Board members on both sides expect the integration to be straightforward, as the societies have similar business models.

The move, which comes just days after Yorkshire Building Society agreed to take over smaller rival Barnsley, could place Skipton among the UK’s top five building societies.

The merger, which should be completed early next year, will create a mutual with over 860,000 members and assets of £16 billion.