Iain Cornish will remain on board as the Chief Executive of the enlarged Society.

Yorkshire and Chelsea Building Societies (BS) have agreed to merge but say job losses are inevitable.

Following a revelation yesterday that the UK’s second and fifth largest building societies had begun merger discussions, they have confirmed today (2 December) that their Boards have agreed merger terms, creating a second major force in the mutual sector, behind the Nationwide.

The merger, they say, will provide huge benefits to members, providing security and stability and offering good value products as well as continued excellent customer service.

The Boards confirmed that branches will remain in all locations where either the Yorkshire or Chelsea currently has a presence.

However, in the joint statement, the societies said that the merger will inevitably lead to job losses, but redundancies will only be considered following a full staff consultation and after taking into account all other avenues.

Iain Cornish, Chief Executive of Yorkshire BS, said: “Joining with Chelsea offers a great opportunity to build on the strengths of both societies and form a strong, independent mutual organisation.

“The enlarged Society will continue to have one of the strongest capital positions of any major UK bank or building society and a secure funding base. I firmly believe that a merger with Chelsea on these terms is in our members’ interests and urge them to vote in favour of it.”

Stuart Bernau, Executive Chairman of Chelsea: “Chelsea and Yorkshire have proud histories as mutual organisations; each is committed to providing high levels of customer service to their members and supporting the communities in which they operate.”

Mr Cornish will take up the position of the CEO of the enlarged mutual, but Mr Bernau will relinquish his Board position immediately prior to the merger becoming effective.

The Boards confirmed that although the enlarged Society will be called Yorkshire Building Society, with its head office based in Bradford, the Chelsea name will be retained as a separate brand and operations will still exist in Cheltenham.

The proposed merger is still subject to approval from all eligible members and the Financial Services Authority (FSA), but it is anticipated that it will complete on 1 April 2010.

For further details of the merger visit: www.ybs.co.uk