Building Society mergers

Defaqto comment on the Chelsea and Catholic Building Society announcement

The board of directors of the Chelsea Building Society and the Catholic Building Society have agreed in principle to merge.

David Black, Principal Consultant of Banking for Defaqto says: "The costs and time taken to comply with all the various regulations are particularly onerous for smaller institutions.

For this reason I fully expect to see further consolidations within the Building Society industry as considerable economies of scale can be achieved." "With a small Building Society there will be a limited number of staff and they have to devote a disproportionate amount of time to dealing with regulations which inhibits them from devoting time to other matters.

By merging with a larger society it will enable them to more effectively serve their customer base with a broader range of products across many distribution channels".

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