Yorkshire Building Society and Chelsea Building Society have announced they have reached an agreement to merge.
The enlarged society will be known as Yorkshire Building Society, with the Chelsea Building Society name retained and operated as a separate and distinct brand within the Yorkshire.
With combined assets of £35 billion, a total of 2.7 million members and a national network of 178 branches, the societies said they would provide a competitive and secure alternative to the retail banks.
Its focus will be on the traditional building society business of residential mortgages and savings and will be principally retail funded.
Although a branch presence is to be retained in all communities in which there is currently a Yorkshire or Chelsea branch, it has been confirmed the merger will lead to a number of job losses.
In a temporary measure until 30 December 2010, it has also been confirmed that members who are savers of both the Yorkshire and Chelsea at the time of the merger will benefit from a separate maximum £50,000 depositor protection per individual under the Financial Services Compensation Scheme.
Although the merger is subject to the approval of eligible members from both societies and confirmation by the FSA, it is expected to be completed on 1 April 2010.
"The news that the combined society is to keep both brands will be welcomed by the hard hit mutual sector," said Michelle Slade, spokesperson at Moneyfacts.co.uk. "The financial strength of the larger society is likely to see them both continuing to offer competitive products, particularly in the savings market, with the added assurances that any money invested with both brands will be protected separately."
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