TON Building Society is to merge with its smaller rival Chesham, the mutual said yesterday, as it unveiled a bumper rise in annual profits and defended its contentious decision to hike its standard variable mortgage rate (SVR).
Skipton said the merger would take its branches from 89 to 92 and gave a guarantee that it would not impose compulsory redundancy on branch staff as a result of the move.
The firm said the two societies “share a similar ethos, centred on offering outstanding service to their members and supporting the communities in which they operate”.
The news came as Skipton posted a near-tripling in group pre-tax profit to £63.5m, boosted by a £40m windfall from the sale of its credit and marketing services subsidiary, Callcredit Information Group, in December.
Skipton’s chief executive David Cutter added that the action taken by the group to raise its SVR was “prudent” in the current turbulent environment.
“Uncertainties remain regarding the economy, the government’s finances, the impact of an historic quantitative easing programme and the distortions in the UK savings market,” he said. “We therefore remain vigilant.”
The group is facing a hostile backlash from customers over its decision to raise the SVR from 3.5 per cent to 4.95 per cent from 1 March, despite its promise that the rate never rises more than three per cent above the Bank of England base rate.