The Yorkshire Building Society, Britain's second largest lender of its kind, and the Chelsea Building Society on Wednesday announced plans to merge. The plan would consolidate Yorkshire Building Society's position by creating a group with assets in excess of 35 billion pounds ($58 billion). The combination, with 2.7 million members and 178 branches, will focus on the traditional building society business of residential mortgages and savings and will be principally retail funded. The enlarged society will be known as Yorkshire Building Society, continuing to be based in Bradford in central England, with the Chelsea Building Society name retained and operated as a distinct brand. Subject to approval from regulators and eligible members of both societies, the deal is expected to be completed by April 1, the companies said. The companies said three-fourths of Chelsea's creditors, sufficient for approval at a general meeting, have agreed to a debt swap in which 200 million pounds of subordinated notes will be exchanged for 100 million pounds of convertible notes in the new company, paying a higher rate of interest. The enlarged society will continue to have one of the strongest capital positions of any major UK bank or building society and a secure funding base.
