Skipton takes over Capital One savings accounts as it looks to grow

SAVERS with Capital One will have their money transferred to Skipton Building Society next month as it looks to lead further consolidation in the sector.

Capital One is withdrawing from the UK savings market and hopes to transfer all accounts to Castle Money, a trading name of Skipton Building Society, by July 27 – subject to the approval of the Financial Services Authority (FSA).

The move, which sees Capital One credit cards unaffected, follows the merger of Skipton with its smaller rival, the Scarborough building society, last year. The merger made Skipton the UK’s fifth largest society with around 860,000 members.

Skipton’s move also follows reports at the weekend that it is gathering a war chest worth up to £400m to fund rescue takeovers of some of its struggling rivals.

The society, headed by chief executive David Cutter, is said to be considering a sale of at least three of its noncore businesses to raise cash – thought to be its credit-check agency Callcredit, its estate-agent chain Connells and mortgage-servicing business HML.

Mr Cutter said: “This agreement with Capital One dovetails with Skipton’s growth aspirations as a top UK building society.

“It will further strengthen Skipton’s funding base, in line with our strategy of further reducing our reliance on the wholesale markets as they remain fragile as a result of the credit crunch. Our retail funding portfolio, as a proportion of total funding, is already high at 75%, but will increase further once this transaction is finalised.

“Skipton has long demonstrated an ability to respond creatively to a range of market conditions, not least through our uniquely diversified group model. This latest, innovative development will further strengthen our funding position and I am looking forward to welcoming these new savers into the Skipton stable.”

Brian Cole, interim managing director of Capital One Bank said: “As a corporation, Capital One has a strong and flexible funding portfolio, which provides solid alternative sources of funding. This means we can fund the UK business more efficiently through our parent than by operating a standalone UK savings business.”