Nationwide swallows up two rivals

Published:
08 September 2008
Topic:
News,Money,Mortgages

One of the country's main mortgage lenders has announced it is to merge with two smaller mutual societies which have been hit by the ongoing financial turmoil.

The Nationwide announced the mergers with the Derbyshire and Cheshire building societies after both groups asked it to consider deals following the identification of financial issues. Both groups expect to report losses for the first half of 2008.

The Cheshire has assets of £4.9 billion, 45 branches and more than 440,000 members, while the Derbyshire has assets of £7.1 billion, 50 branches and 485,000 members.

The brands and branch networks of both the mutuals will be retained and no special payments will be made to members of the two societies.

Derbyshire's £17 million deficit reflects its exposure to sub-prime and commercial loans, while the Cheshire fell into the red by £10.5 million because of a one-off write-down on a single commercial loan.

Nationwide chief executive Graham Beale said the core parts of the societies were in good shape and that it was in a "unique position", given its size, to offer support.

The deals create an organisation with almost 15 million members, around 1,000 retail outlets, £191 billion of assets and £122 billion of retail deposits.

Copyright © PA Business 2008

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