by Mark Johnston
Customers of the internet bank Egg are set to move to Yorkshire Building Society following a move by the northern based company to purchase Egg’s customers. The move which was announced recently still requires approval in the courts as it will mean £2.5 billion of savings and £430 million in mortgages will move to the Yorkshire Building Society.
All in all a total of 550,000 customers will switch in the deal in which the amount being paid has not yet being made public. Egg was launched by Prudential back in 1998 as an internet only bank well before it was commonplace to do banking in this way. It is now one of the largest internet banks with well over 2 million customers. In 2003 the Prudential decided to sell Egg with keen interest from banking giants HSBC and the Royal bank of Scotland but with no firm offers by 2004 they took the firm off the market. But in 2007 Citi Bank bought the company for £575 million.
Yorkshire Building Society will also get the rights to use the Egg brand in the sale but around 600 jobs may be lost in Eggs Derby based office. The sale follows Citi banks sale of Eggs credit card customer base to leading bank Barclays earlier this year.
Although the Egg brand will be used for the next 12 months Tanya Jackson, a spokesperson for the building society could not confirm plans for the brand beyond this time. Ms Jackson confirmed that they hoped the sale would be completed by the end of 2011.
Once completed all Egg customers will be part of the mutual and be full voting members and would be migrated onto the building societies systems. The building g society added that the mortgage book was good value as it is made up of good quality loans that have few arrears and excellent loan to value which represents a low risk to the firm.
The Yorkshire Building Society, which is the second largest of its type in the United Kingdom has its head office in Bradford, West Yorkshire. With Assets well over £20 billion pounds. Back in 1864 the Huddersfield Equitable Permanent Benefit Building
Society was born and has grown over the years through many mergers and continued expansion to what we know as the Yorkshire Building Society today.
Andrew Hagger an industry experts said: “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. 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.”
Earlier this month the Yorkshire Building Society reviewed its mortgage range and is cutting the rates on a number of its products. As part of the review into the Yorkshire Building Societies mortgage range they have decided to cut interest rates on their two year fixed rate mortgages as well as their five year fixed rate mortgage range. These changes have resulted in the Yorkshire Building Society being catapulted to the top of the mortgage best buy tables.
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