Derbyshire Building Society failings reported as merger with Nationwide announced

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Derbyshire Building Society failings reported as merger with Nationwide announced

Derbyshire Building Society is to be taken over by Nationwide, it has been reported.

According to the Times, Derbyshire, Britain's ninth-biggest building society, admitted to facing "material financial uncertainties".

It is being taken over by Nationwide but has been severely shaken by a badly timed £1.4 billion expenditure in sub-prime lending, a faulty IT system and unsuccessful risks in money markets.

Nationwide chief executive Graham Beale told the Times that Derbyshire's proportion of sub-prime borrowers more than three months in arrears was "very high" at nine per cent.

According to Reuters, Nationwide is also to take over the Cheshire Building Society.

Nationwide reportedly said its move was instigated by Derbyshire and Cheshire, which approached it after enduring first-half, pre-tax losses of £17 million and £10.5 million respectively.

To preserve capital, there will be no payout to Cheshire and Derbyshire customers.

In a statement, Mr Beale said the two smaller societies had decided the merger with Nationwide was "in the best interests of their savers and borrowers".

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