EMBATTLED building society Norwich & Peterborough has agreed merger terms with the Yorkshire Building Society, just days after it was forced to pay £1.4m by the Financial Services authority
The East Anglian mutual will merge with its larger rival to create a group with assets of around £34bn, three million members and 224 branches.
Yorkshire said it would honour N&P’s pledge to pay compensation to customers who it advised to invest in Keydata’s structured products before the provider went bust, losing investors millions.
N&P was earlier this week fined by the FSA for mis-selling products operated by the now-collapsed Keydata.
The combined society, which will be known as Yorkshire Building Society, will be focused on the traditional building society business of residential mortgages and savings and will be principally retail funded.
Yorkshire Building Society chief executive Iain Cornish said: “We will build on N&P’s strong brand and the value it has delivered to its members, while gaining the opportunity to consider developing our own products in areas where N&P has complementary capabilities and expertise.”