24th May 2006 09:03
Newcastle Building Society24 May 2006 For Immediate Release24 May 2006 Universal Building Society announces decision to merge with Newcastle Building Society The Directors of Universal and Newcastle Building Societies today announced thatthey have agreed to a merger. Subject to approval by members of Universal, andconfirmation by the Financial Services Authority (FSA), this is expected to beeffective on 31 December 2006. Although some details are still to be finalised, the key points are: * The enlarged building society will remain a mutual, owned by its members, and will be named Newcastle Building Society. * Universal and Newcastle operations are geographically complementary. The merger will significantly improve the distribution of products and services to members of the Universal. * Under the proposed merger, Colin Seccombe, Chief Executive Designate of Newcastle Building Society will be Chief Executive of the enlarged society. Two non-executive directors of Universal Building Society will join the Newcastle Board. * Kevin Robinson, Chief Executive of Universal Building Society, will be appointed Director of Integration, a non Board role at the Newcastle. * Newcastle has guaranteed Universal staff jobs for three years. There will be no compulsory redundancies either within the branch network or at Universal's head office as a result of the merger. Newcastle will be retaining the head office building as an administrative office for at least three years. Due to the geographical fit of the two societies there are no anticipated voluntary redundancies either. Inevitably there will be an element of duplication of functions, so some staff roles will change slightly. In addition there will be no compulsory redundancies at the Newcastle Building Society as a direct result of the merger. * Universal's branches will be incorporated into the Newcastle's network to enhance the service offered to members of the enlarged society. The branches at Penrith, Berwick, Ponteland and Consett are in areas not currently covered by the Newcastle. The Newcastle has undertaken to maintain a branch presence in these areas for at least three years. Where there are both Newcastle and Universal branches; in North Shields, Chester-le-Street, Morpeth and Hood Street, the branch offering the best facilities and service for customers will be retained (and the other branch will be closed) with the two branch teams combined with no staff redundancies. Newcastle will be retaining the Universal head office building, but the head office branch will close without any compulsory redundancies. * As the Newcastle engages in a number of additional activities, through its growing advice-based channels and its business-to-business strategic solutions arm, there are likely to be a number of exciting new opportunities for Universal staff. * A merger bonus will be paid to qualifying borrowers and savers of Universal Building Society. Each qualifying member of Universal is expected to receive a taxable merger bonus of at least £200, although details are yet to be finalised. Commenting on the proposed merger Kevin Robinson, Chief Executive of Universalsaid "This is an exciting and important decision for Universal Building Societywhich offers benefits to our members and staff alike. The proposed merger withthe Newcastle will allow our members to benefit from additional products andservices. The geographical fit of the Societies also means that we are able tocomplete the merger with no requirements for redundancies and offer job securityto all our staff for at least three years." Colin Seccombe, Chief Executive Designate of Newcastle commented: "We aredelighted that Universal has chosen Newcastle as its merger partner. Small andmedium-sized building societies play an extremely important role in financialservices and can therefore operate with healthy profits, but there is no doubtthey are competing in a challenging market. Members of both societies can, inour view, only benefit from this merger. We believe the enlarged society'seconomies of scale and wider distribution will generate tangible benefits interms of products and pricing." - Ends - Editors NotesIt is expected that eligible savers and borrowers of Universal will receive fulldetails of the proposed merger in August together with details of the mergerbonus arrangements. Bonus payments to qualifying savers will be based on thelower of account balances at the close of business on 23 May 2006 and a futuredate which will be disclosed in the merger booklet. A minimum savings balance asat 23 May 2006 of £100 will be one of the qualifying requirements for savers.Details of the merger bonus for qualifying borrowers will be disclosed in themerger booklet. Payment of the merger bonuses is dependent upon the approval ofthe merger by Universal's members and confirmation of the merger by the FSA. About NewcastleThe Newcastle Building Society is the biggest building society based in theNorth East. With assets under management of over £3.8bn it is certainly largeenough to compete but small enough to care deeply about the needs of members. Itis committed to providing a range of innovative and attractive products. The Newcastle Building Society is committed to remaining mutual and by doing sofeels it is better placed to continue to provide members with a high quality ofservice. About UniversalThe Universal is currently the 29th largest building society in the UK withassets of £600m. Based in Newcastle, the Universal has nine branches andcurrently employs around 130 staff. For further information, please contact: Charlotte O'Brien/ John WriglesworthThe Wriglesworth Consultancy 020 7845 7900/07703 258488(CO'B) Kevin Robinson, Chief Executive, Universal Building Society 0191 2692110 Colin Seccombe, Chief Executive, Newcastle Building Society 0191 2442433 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Newcastle 125/8