The Yorkshire Building Society wants to complete its acquisition of Egg Banking plc’s mortgage and savings business on 31 October 2011.
The Egg business consists of a £2.5 billion savings book and a £430 million mortgage book. The Yorkshire will also be able to continue using the Egg brand.
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 FSA.
Following completion of the transaction, existing Egg borrowers with branded Egg or Pi mortgage accounts whose rate is set at or linked to the Egg or Pi standard variable rate (SVR) will be automatically moved to the Yorkshire’s SVR. The current Yorkshire SVR is 4.99% while the equivalent rate for Egg borrowers is 5.29% and for Pi borrowers 6%.
Members who are savers with both the Yorkshire Group and Egg at the time the transaction completes will be covered under the Financial Services Compensation Scheme (FSCS) by one depositor protection limit of £85,000 for individuals or £170,000 for joint accounts.
The Yorkshire says it will put in place measures to allow the relatively limited number of members who are expected to exceed the FSCS protection limit as a result of this transaction to reduce their balances without notice or loss of interest within 60 days of the completion date. The Yorkshire will write to such affected members after completion of the transaction.
