Goodbye the Leeds

THIS Tuesday, a third of the UK's building society sector will change for ever. Cheltenham & Gloucester will officially become part of Lloyds Bank, while all branches of the Leeds will re-open as branches of the Halifax.

The changes are more than symbolic, and illustrate the "merger fever" in the embattled mutual building society industry. National & Provincial is also in the process of being sucked into Abbey National.

C&G, which claims to be the lowest-cost provider of mortgages among societies, will become a "mortgage factory" for Lloyds. The 147-year-old Leeds will disappear into the maw of the Halifax, as a prelude to converting into one of the UK's biggest banks.

The most apparent changes will be at the Leeds. All its 400-plus branches closed yesterday lunchtime and will stay shut tomorrow while the "Leeds" signs are replaced by Halifax livery. They will reopen on Tuesday with their famous "liquid gold" accounts, as advertised by the ubiquitous George Cole of Arthur Daley fame, rebranded as "Halifax liquid gold".

Leeds' mortgages will stay much the same, but its insurance and unit trust products will switch to Halifax.

Lloyds, meanwhile, is licking its lips at the prospects for selling C&G mortgages through its 1,800 branches, following its pounds 1.8bn acquisition of the society. Sir Brian Pitman, Lloyds' chief executive, said on Friday: "C&G . . . will be the lowest-cost producer among all the national building societies. C&G will offer mortgages at 25 basis points [0.25 per cent] lower than some other named competitors. We already have some pilot ventures between Lloyds and C&G."

He compares C&G's costs, at 30 per cent of income, with Lloyds' own 60 per cent, the average for the high-street banks.

The remaining societies acted last week to avoid being picked off by a bank. They increased the minimum amount required in their savings accounts, to stop the current sport of depositing pounds 100 in each society in the hope of a "winner" - an acquisition payout by a bank predator.

Societies have been besieged by punters hoping to cash in on merger mania. Two societies have already reacted by hiking their minimum savings levels in order to stop this "hot money" sweeping around the system. Others say they are preparing to follow.

Woolwich has increased its minimum balance from pounds 100 to pounds 500. Chelsea has acted similarily, raising its minimum investment for the Instant Options account from pounds 100 to pounds 1,000. Both are potential bid targets.

Alliance & Leicester and Nationwide said they may follow suit. The Yorkshire has seen 300-400 new accounts being opened every week at its 134 branches, far more than normal.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific