The combined second biggest mutual in the UK will be known as Yorkshire Building Society, bringing N&P, the ninth biggest mutual with assets of £3.7bn into the fold, with no branch closures promised for two years.
The N&P name will be retained as a separate and distinct brand within the Yorkshire, similar to the Chelsea and Barnsley brands, which have also been merged into the Yorkshire.
The proposed deal, if approved, is expected to complete on 1 November 2011. Ex Standard Life Bank CEO, Anne Gunther’s appointment as chief executive of N&P was announced yesterday.
The current SVR s for Yorkshire and N&P respectively are 4.99% and 5.35%, with no SVR guarantee after completion of the merger.
Gordon Horsfield, chairman of N&P, said economies of scale and “continued levels of investment” were needed across the business to keep delivering the service expected.
However, the FSA fined N&P £1.4m for giving unsuitable advice on Keydata products this week, following previous confirmation the beleaguered building society will be forced to make £51m in compensation payments to customers.
Yorkshire BS confirmed N&P has already made provision to compensate investors mis-advised by N&P branch advisers on the Keydata product and said the pay outs would “take as long as they take.”
An N&P spokesperson said the merger won’t make any difference to pre-announced arrangements and customers will start receiving formal letters next week detailing figures for individual pay outs.
Yorkshire said a high street branch presence will be retained in all communities where either the Yorkshire or N&P currently have a branch, extending Yorkshire’s national branch network.
N&P said its existing branches will be maintained for a minimum of two years with just two streets with branch crossover, due to the geographical fit.
Iain Cornish, chief executive of Yorkshire Building Society, said: “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.”
Gordon Horsfield, chairman of N&P, said: “The opportunity to merge with so highly a respected society as the Yorkshire, where these qualities are so evident, is one which is right for N&P. We particularly value their commitments to our members to maintain the branch network, their interest in and concern for our staff, and the open-mindedness and appreciation they have shown of our ideas, products and expertise where these are not presently offered by the Yorkshire, with a view to making them more widely available”.
Yorkshire’s existing head office in Bradford will remain the head office of the enlarged Society and an important operational presence will be retained in Peterborough for at least three years.
The enlarged Society will be run by the Yorkshire Board and executive management team and there will be no changes in respect of interest rates of savings accounts or mortgage accounts, other than the move to the Yorkshire SVR for relevant N&P borrowers after the merger.
All N&P ‘s wholesale liabilities, including subordinated debt, will be assumed by the Yorkshire with their terms unchanged when the merger becomes effective.
