Scarborough & Skipton Building Societies Merging

Moon_Boi

Scarborough & Skipton Building Societies Merging, but no windfall payments :mad: :mad:

http://www.investegate.co.uk/Article.aspx?id=200811031545002700H

http://www.skipton.co.uk/scarborough/

Cozworth806

Bit odd really, Scarboro branches in Hull Lincoln, Leeds, Nottingham and York duplicate Skipton branches, (Skipton also have branch in Scarboro, where Scarboro have 2 obviously) so only leaving Bridlington, and Middlesboro as not overlapping.

"This is a real opportunity for the North Yorkshire based societies to create an enlarged Society that is even better placed to deal with any future uncertainties in the financial marketplace. The two societies are well matched, having similar business models, a strong geographical fit and shared commitment to mutuality, their members, their people and their local communities"

Hmmm!

Scarboro CE is retiring in December, perfect opportunity to merge really


Can see this as a Skipton takeover in anything but name only, I wonder if the FSA rules excepting a vote will be invoked :rolleyes:

"The merger will proceed under section 42B(3)(b) of the Building Societies Act on the basis of a board resolution of Scarborough as permitted by a direction given by the Financial Services Authority (FSA). The FSA has also consented to Skipton proceeding by a resolution of its board of directors. As such, this means that a vote by Skipton and Scarborough members will not be required. The merger is also subject to confirmation by the FSA and approval by the Office of Fair Trading (OFT)"

Quelle Surprise!!!! If it is a takeover then pay out otherwise if Scarboro is bust then tell it like it is, rather than flannelling the situation

apt

Anyone expecting windfall payments is living in the past. In the past few years there has probably been too many deals on both the saving and mortgage side that were unsustainable. But in the medium term I fear the reverse - that both the banks and building societies will be highly concentrated and that there will be very little competition. It would have been better for customers and staff if HBOS were to be taken over by a solid continental bank or a large insurance company rather than the anti-competitive take-over by Lloyds.

martinman3

Cozworth806 wrote: »

Bit odd really, Scarboro branches in Hull Lincoln, Leeds, Nottingham and York duplicate Skipton branches, (Skipton also have branch in Scarboro, where Scarboro have 2 obviously) so only leaving Bridlington, and Middlesboro as not overlapping.

From the Scarborough BS website

Will any Scarborough branches close?

The enlarged Society will keep a branch presence in all towns where Scarborough is currently represented.

meaning only one branch where there is duplication.

The merger statement says

The enlarged Society expects to retain a significant presence in Scarborough and no compulsory redundancies are planned.

so will be relying on "natural wastage" as they call it.

baby_boomer

Cozworth806 wrote: »

if Scarboro is bust then tell it like it is, rather than flannelling the situation

Agreed.

As I posted on MSE on 11 October in the "Are BSs a safer bet thread"

"My main worry about the Scarborough is that it increased its mortgage book in the year to April 2008 by 57%.

Perhaps not the best time to have done this if they actually lent most of that money against the housing market at LTVs of more than 75%. It would also mean that many of their loans were at low rates, and that a substantial proportion of their borrowers haven't yet had the experience of forking out at the Standard Variable Rate while fighting rising fuel & utility bills.

I actually assume that this was achieved by buying in a loan book. So I'd want to know what was in this mortgage book before pronouncing them a good bet. It was bought-in loans that did for Derbyshire.

Scarborough's reserves aren't the strongest in the sector. The mortgage expansion pushed their gross capital ratio down to 5.77%....."

Damn right this needs to be a £0 merger. Even at £0 I am concerned that Skipton members are diluting their assset share. Scarborough members should be PAYING Skipton to take them over IMHO.

Cozworth806 wrote: »

Bit odd really, Scarboro branches in Hull Lincoln, Leeds, Nottingham and York duplicate Skipton branches, (Skipton also have branch in Scarboro, where Scarboro have 2 obviously) so only leaving Bridlington, and Middlesboro as not overlapping.

It looks to me that the FSA is keen to organise LOCAL takeovers of BSs [e.g. Yorkshire/Barnsley] so that branches can be closed in order to boost profits and repair any potential credit crunch damage to capital ratios. [Not dissimilar to the HBOS / Lloyds TSB merger.]

For whole decade, BS bosses have deliberately avoided such mergers because they didn't want anyone to say that BSs closed branches :rotfl: Idiots. If they'd gone for them then societies wouldn't need emergency rescues now at the rate of 1 a month and members would have received windfalls into the bargain and the FSA wouldn't need to be clucking around like a mother hen worried about the safety of multitudes of her chicks.

baby_boomer

YPN - Early November

"....The current difficult trading conditions have had a substantial impact on Scarborough's profits and led to a weakening of its capital position...."

YPN late July

"Barnsley [is a ]cracking little society" said an "industry insider".

"Scarborough Building Society is robustly committed to an independent mutual future" said the head of Scarborough PR.

Don't believe a word any of them say in future

Or the FSA

opinions4u

Will there be any more than a dozen building societies at the end of 2009?

I personally doubt it.

baby_boomer

4 building societies [by 2015?] will be a lot easier for the FSA to regulate than 59 (at the start of 2008).

There are still some well capitalised smaller ones which will hold out for a few years until the reserves have been squandered keeping the overmanned and overpaid directors in their dotage.

Then they'll also fall to the Nationwide for £0 .

Milarky

It still remains a fact that the repeated use of this rule 42 (3)(b) is one of expediency - not necessity. Votes could be organised - but what would they in all honesty tell their respective memberships? "You know how ropey the FSA has been saying things have become within the mortgage and banking sectors lately? Well, we're in far worse shape than that! Whilst you can't expect a windfall from this proposal of course, and if you don't vote for merger with XYZ there is a high likelihood we will be bankrupt within six months, their directors are telling they just hoping to hang on till next Xmas - when the Nationwide says it will be ready to take us over, and they can draw the pension"

[Oh, how I wish the FSA had put their money in Iceland!]

bristolleedsfan

baby_boomer wrote: »

YPN - Early November

"....The current difficult trading conditions have had a substantial impact on Scarborough's profits and led to a weakening of its capital position...."

YPN late July

"Barnsley [is a ]cracking little society" said an "industry insider".

"Scarborough Building Society is robustly committed to an independent mutual future" said the head of Scarborough PR.

Don't believe a word any of them say in future

Or the FSA

Which one next to give up its independence. :think:


http://www.yorkshirepost.co.uk/businessnews/Special-Report-Building-societies-braced.4334309.jp ( Late July)


"Beverley's chief executive, Phil Gray, said he is very confident about the society's future and said he couldn't see Beverley taking part in future consolidation. "We are 100 per cent retail funding and we've been that way for the past four years. We have no wholesale funding. We are comfortable about where we are." :think:

Ivan_Konstantinov

hi is my Market Harborough Building Society safe>?thanks