Member Statement (issued 3 November 2008)
Scarborough Building Society has seen difficult trading conditions leading to a substantial impact on profit and a resultant weakening capital position. In addition, the board of Scarborough has considered the possible impacts of continuing house price falls and the impending recession in the UK, and has concluded that the effect would be an unacceptable reduction in its capital resources and that, to fully protect the interests of its members, it should approach Skipton Building Society as its preferred merger partner.
It is anticipated that the enlarged Society will be a top five building society with approximately 860,000 members and over £16bn of assets.
John Goodfellow, Chief Executive of Skipton said:
"I am delighted that the societies are merging and this is beneficial to members. By joining forces, these two societies will create a significant force in the building society sector, modern mutual that is set to grow further in the years to come.
"There are benefits for both sets of members, who can look forward to a continued relationship with a building society that puts their long-term interests at the heart of what it does."
About Skipton Building Society
Skipton was founded in 1853 and is the UK's 6th largest building society with over 660,000 members, 84 branches, 19 subsidiaries, group assets of £13.4bn† and reported a pre-tax profit of £44.1 million for the half-year to 30 June 2008. Skipton has strong retail funding lines, good liquidity, excellent capital strength and high asset quality – making it one of the most financially robust building societies.
†As at 30 June 2008
About Scarborough Building Society
Scarborough was founded in 1846 and is the UK’s 17th largest building society, with over 200,000 members across the UK, nine branches and assets of £2.85bn**. Its mortgage lending is 97% funded by its retail savers and, in the year to 30 April 2008, it made a pre-tax profit of £7.8 million.
**As at 30 April 2008
What does this mean for Skipton members?
Membership rights will be unaffected. Skipton members will see no changes to their membership rights at all. Scarborough members will become subject to the membership rules of the enlarged Skipton Building Society.
There will be no 'windfall' payment for members of either society and Skipton members will see no difference in their day-to-day relationship with the Society.
Scarborough members may see some changes to their savings or mortgage accounts as they are transferred to Skipton on similar or better terms.
We will write to members in advance to explain what these changes are and how they may affect them.
What happens next?
If you have any queries please call Skipton’s contact centre on 0845 850 1700* Monday to Thursday - 8.00am to 8.00pm, Friday - 8.00am to 5.30pm, Saturday - 9.00am to 12.00pm. To help maintain service and quality, some telephone calls may be recorded and monitored.