The Boards of Yorkshire Building Society and Chelsea Building Society are in advanced merger talks.

The Yorkshire is the UK’s second largest society with two million members, 143 branches and assets of over £20 billion, while the Chelsea has its head office in Cheltenham and is the UK’s fourth largest society with approximately 700,000 members, 35 branches and assets of £14 billion. It was recently hit by large scale losses from buy-to-let fraud.

For a merger to proceed, the Boards of both societies would need to be satisfied that it will be for the benefit of each Society’s members.

Any merger would require the formal approval of both the Yorkshire and Chelsea savings and borrowing members. The merger would also be subject to confirmation by the FSA.