Skipton Building Society, the UK’s
fourth-largest building society, is to merge with Chesham Building
Society to create a mutual with over £15bn ($22.8bn) of assets and
a network of 92 branches.

The merger is expected to become
effective on 1 June 2010, subject to confirmation by the UK’s
regulator, the Financial Services Authority and approval by
Chesham’s members.

Skipton chief executive David Cutter
said: “We have always made it clear that we would consider further
merger activity where it is in the best interests of our
members.

“We believe this union will provide
positive product and service benefits for the combined customer
base of the enlarged society.”

Chesham said the move was “in the
best interests of its members” because of the “clear benefits of
being in a larger building society and a larger capital base”.

Chesham already uses an IT platform
provided by a subsidiary within the Skipton Group.

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The announcement comes as Skipton
posted a massive jump in pre-tax profits to £63.5m from £22.5m a
year earlier and as Coventry Building Society said it was set to
take over its smaller rival Stroud & Swindon.

The move is part of Skipton’s drive
to strengthen its capital base, and comes a year after its merger
with Scarborough Building Society, which boosted the bank’s assets
by £2.6bn at the time.