25th July 2011
Yorkshire Building Society is to acquire the Egg's £2.5 billion savings book and £430 million mortgage book. Yorkshire BS will also acquire the Egg brand but not its 600-strong workforce. However, an unspecified number of staff will be retained by Citi under an outsourcing agreement with Yorkshire until the end of 2012.
The announcement comes just four months after Egg's US owner, Citi, sold the brand's credit card business to Barclays.
Yorkshire BS is the UK's second largest building society with assets exceeding £30 billion. It says it focuses on providing its members with financial security and long-term value across a comprehensive range of products backed up with excellent customer service.
The acquisition of the Egg savings and mortgage books is in line with Yorkshire's strategy to take advantage of opportunities which it considers to be in the long-term interests of its current and future members.
The acquisition is to be implemented by a banking business transfer under Part VII of the Financial Services and Markets Act 2000. This process is subject to approval by the High Court, which amongst other considerations will take into account the opinion of the Financial Services Authority (FSA). The acquisition is expected to complete in the fourth quarter of 2011.
Iain Cornish, chief executive of Yorkshire BS, says: "We are looking forward to welcoming Egg's mortgage and savings customers to the Yorkshire. Continuing to provide them with the outstanding service, administration and value that they have been used to, and which is consistent with our own approach, will be a priority for us and we will work closely with Egg to ensure that customers are kept fully informed throughout this transfer process."
Andrew Hagger of Moneynet says the move will raise a few eyebrows amongst the Yorkshire's competitors.
"The acquisition of a new £2.5bn savings book will enable one of the most competitive mortgage providers in the UK to expand its lending activities to a much wider audience," he says. "Yorkshire dominates the mortgage best buy tables and was the winner of the Moneynet 2011 award for overall mortgage provider of the year.
"It's been a rocky few years for building societies, but Yorkshire BS is proving that the sector still has plenty of fight left in it and that it has the vision and determination to be a serious player on our high streets."
Egg was set up by Prudential in 1998. Current owner Citi acquired the business from Prudential for £575 million in 2007 before the credit crunch and recession meant it required a US government bail-out.
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