Gloucestershire's loss is Yorkshire's gain

THE takeover of Chelsea Building Society has proved to be a shot in the arm for larger rival Yorkshire, giving it pre-tax profits of £65.4 million.

Yorkshire, the UK's second largest building society, took over the troubled Cheltenham-based business in April and has just released its half year results to June 30.

Its assets have increased by 37 per cent to £31.billion following the merger with its smaller rival.

It said the benefit to its balance sheet has been "ahead of expectations".

Iain Cornish, chief executive of Yorkshire Building Society said: "The actions we took during 2009 provided the group with strong foundations, which have seen the society return to healthy profitability.

"The integration with Chelsea Building Society is progressing extremely well and is ahead of plan. I am confident of delivering the target savings by the end of 2011.

"This achievement is in no small way due to the hard work and professionalism of our staff across the group and I thank them for this terrific effort."

Gloucestershire workers have been told that only an estimated 250 to 300 of the 700 staff pre-merger are expected to remain when the integration is complete next year.

Chelsea had 140 workers at its call centre in Charlton Kings and 579 at its Thirlestaine Road headquarters, in Cheltenham, which is now expected to be sold. And more than 100 employees have already left the business or are in consultation over redundancies.

Figures show the merger, overwhelmingly approved by members of both societies and completed on April 1, has cost £2.4 million in administration fees to date.

Chelsea was left exposed to an approach from a larger lender following the financial crisis which sparked the recession.

Its position weakened by mortgage debt and the Icelandic banking crisis. It had £55 million invested in Icelandic banks.