The Nationwide Building Society has announced plans to merge with two of its smaller rivals, the Derbyshire and Cheshire Building Societies, after they individually approached the Nationwide to help them survive the economic climate and seek protection for their borrowers and savers.
Small lenders are under increasing strain with the credit squeeze and rising mortgage defaults and both firms said they expected to make a loss in the first six months of 2008 as a result of the declining UK commercial and residential property market.
The merger is expected to be completed by the end of 2008, subject to approval by the Financial Services Authority and the Office of Fair Trading, and will create an organisation with almost 15 million members.