N&P payout at least pounds 500

JOHN WILLCOCK

Financial Correspondent

National & Provincial Building Society members will receive cash payments proportional to balances of up to pounds 50,000 following the pounds 1.35bn takeover by Abbey National.

On Monday N&P will give details of the cash bonuses, which will include at least pounds 500 to all 1.3m members with a minimum balance of pounds 100 in the society at 28 April this year.

This payout will take up roughly half the pounds 1.35m price tag, and the other half will be paid out to savers of more than two years standing in amounts to be revealed on Monday.

The planned merger between N&P and Abbey National will create Britain's second biggest mortgage lender with a 15.per cent share of the market.

N&P chief executive Alastair Lyons is also expected to confirm that employees and pensioners of the society will receive the same amount, but directors will gain no benefit from the merger. Directors will not be able to take part in Abbey National's share option scheme until two years after the merger.

Savers of two years standing will get more - depending on the size of their accounts. People who are both savers and borrowers will receive benefits in both capacities.

The merger is subject to the approval of the Building Societies Commission and N&P members, who will be balloted next year.

The N&P board is unanimously recommending approval and hopes the merger will be completed within a year. This is despite the fact that Abbey's approach was the first ever hostile bid for a mutual society. Members of the society will not receive any cash until the deal is completed.

Both sides insist there will be no compulsory redundancies in the branch network, though 120 branches will close.

The society said when the takeover was announced in July that some jobs may go, but compulsory redundancies would be extremely limited because of opportunities for retraining, a recruit freeze by both organisations and 10 per cent annual turnover of staff.

N&P's Bradford HQ will retain at least its current 1,400 staff. The combined operation will be second only to the recently merged Halifax and Leeds as a mortgage lender and will have 15m customers and 880 branches.