Customers will not receive a windfall when Nationwide acquires the Cheshire and Derbyshire building societies.

The UK’s largest building society, Nationwide, has this week merged with the Derbyshire and Cheshire building societies in two separate deals.

The merger is a lifeline for the companies, both of which racked up losses in the first half of 2008 and were facing uncertainty in the face of the economic slowdown.

The Derbyshire is expected to report losses of £17 million for the half-year to 30 June 2008 whilst the Cheshire is anticipating losses of £10.5m.

Nationwide said it plans to keep both companies’ network of branches open – the Derbyshire operates 50 stores and the Cheshire 45.

Nationwide Chief Executive, Graham Beale, has, however, indicated that many of the 470 staff at the Derbyshire’s head office in Duffield and 356 at the Cheshire’s Macclesfield headquarters will lose their jobs.

Unlike previous building society mergers, customers will not be paid a windfall when the takeovers are completed. They also won’t be consulted about the future of their institutions or given the opportunity to vote on the proposal.

Beale commented on the takeovers: “The mergers with the Derbyshire and the Cheshire provide an excellent opportunity for Nationwide to build on its strong position in the financial services sector by adding two attractive customer franchises creating an organisation with almost 15 million members, around 1,000 retail outlets, £191 billion of assets and £122 billion of retail deposits.”

The deals, which are being backed by the Financial Services Authority, are expected to be completed by the end of December 2008.

For more information, visit: www.nationwide.co.uk

By Natasha Piscitelli