BY ANNA ARCO
THE osmotic Building Society, which has been helping single women, the disadvantaged and charities take out mortgages for the last 40 years. has announced plans to merge with a larger rival.
Chelsea Building Society, which is Britain's fifth largest building society with assets in excess of £13 billion, will probably take over its tiny rival. Whereas Chelsea is a big fish among building societies, with 17 branches in the country, Catholic ranks 57th among Britain's 59 remaining building societies. It has assets of around £44 million, one branch office in Westminster, employs seven people and is reported to have some 4,000 members. Half of these members are said to be Catholics.
The two building societies announced that they were in the preliminary phase of a merger. Under the proposal, Catholic would transfer its engagements to Chelsea. A merger would require both the approval of Catholic members and the go-ahead from the Financial Services Authority (FSA). The decision came after the FSA has increasingly put the country's building societies under scrutiny in the aftermath of the credit crunch. The FSA has said that many building societies have been slow to adapt to the changing financial markets.
According to reports, Catholic Building Society was completing a strategic review at the insistence of the FSA. Despite strong growth under the chairmanship of Clare Whittalcer last year and good ties to Catholic charities and the Church, the organisation is said to have struggled to find funding in recent months.
Catholic's members are expected to get a windfall from the merger, although the size of the bonus has not yet been decided. Shareholding and borrowing members who have held a qualifying savings or mortgage account since May 31,2008 will be eligible for the bonuses from the merger.
Trevor Harrison Chelsea's chairman. said: "We are looking forward to finalising the terms of the transaction with the Catholic and to welcoming the Catholic's members into the Chelsea family in due course."
Clare Whittaker, Catholic's chairman, said: "We are delighted to have chosen Chelsea as our merger partner. The Catholic and Chelsea have much in common and share common values around mutuality and people."