Nationwide is planning to merge with the Derbyshire and Cheshire Building Societies. The largest building society in the UK will support its two smaller rivals, subject to the approval of financial regulators.
The news comes as the two regional lenders both reported losses in the first half of 2008, attributing it to the growing pressures created by the credit crunch.
Nationwide chief executive Graham Beale says: “The Derbyshire and the Cheshire have independently concluded that a merger with Nationwide is in the best interests of their savers and borrowers given the financial issues faced by both societies.”
Customers of the Derbyshire and Cheshire societies will not receive any payouts as a result of the merger.
It is understood that Derbyshire and Cheshire both separately approached Nationwide to help them survive the tough economic climate.
The Derbyshire has assets of £7.1bn, 50 branches and 485,000 members. The Cheshire has assets of £4.9bn, 45 branches and more than 440,000 members.
Combined, the new group will look after almost 15 million members and assets of almost £191 billion.