Merger agreed between Yorkshire and N&P

YORKSHIRE Building Society has announced that it has agreed the terms of a merger with Norwich and Peterborough Building Society (N&P).
The agreement on the deal comes just days after N&P was fined £1.4m by the Financial Services Authority after being found guilty of the “widespread mis-selling” of complex investment products to older people. The building society also faces a £51m compensation bill.
Yorkshire, the UK’s second largest building society, said the move for the UK’s ninth largest society will create an organisation with 3m members and 224 branches and give it more access to the east of England.
Announcing the merger, which is expected to be completed by November 1, Iain Cornish, outgoing chief executive of Yorkshire Building Society, said: “N&P has similar values to the Yorkshire. It shares our commitment to mutuality and our determination to deliver long-term value and exceptional customer service to our members.
“Its traditional building society activities remain profitable and it is well regarded in the communities it serves in the east of England.
“We will build on N&P’s strong brand and the value it has delivered to its members, while gaining the opportunity to consider developing our own products in areas where N&P has complementary capabilities and expertise, such as the current account market.
“We have demonstrated our ability to successfully undertake mergers and deliver benefits to both sets of members. The proposed merger emphasises Yorkshire’s position as one of the UK’s strongest financial institutions, offering consumers a real alternative to the plc profit-driven model of Britain’s banks.”
A Yorkshire Building Society spokeswoman said comprehensive due diligence had been carried out in preparation for the merger and that the society had been aware of the impending FSA fine.
Gordon Horsfield, chairman of N&P, said: “For many years N&P has been committed to putting its customers at the heart of everything we do, and we know from all their feedback that our way of doing this is warmly and loyally welcomed.
“The board concluded some time ago that to uphold this proposition for the longer term requires continued levels of investment in back office, branches, product pricing and range as well as to support training and development opportunities for our staff to help them keep delivering the service expected.
“The necessary resources for this continuing investment can only readily come from the economies of scale, organisational depth and financial strength associated with size. We also strongly believe that the values and culture associated with the mutual business model are the right ones for our market.”
The combined society will be known as Yorkshire Building Society, while the N&P name will be retained as a separate and distinct brand within the Yorkshire, similar to the Chelsea and Barnsley brands which Yorkshire has acquired over the last two years.
Yorkshire said all of N&P’s 46 branches would be kept open for a minimum of two years.
Yorkshire Building Society has assets exceeding £30bn, while N&P, which has its head office in Peterborough, has assets of £3.7bn.
Earlier this week, the Financial Services Authority said N&P had failed in its basic duty to provide suitable advice to customers who lost money when they invested in products with now-collapsed investment firm Keydata Investment Services after taking advice from N&P’s staff.
Law firm Addleshaw Goddard advised N&P on the deal.