Campaign for state-backed bank grows

Jul 6 2009 By The Journal

Society ridicules takeover reports

NEWCASTLE Building Society has rubbished claims that it is in negotiations to be taken over by one of its rivals.

Reports at the weekend suggested the Skipton Building Society was in "advanced" talks to buy the Tyneside mutual, following the Newcastle’s £26m loss in 2008 which included a £43m write-off on deposits it held in two failed Icelandic banks.

But both building societies issued categoric denials of the reports yesterday.

Newcastle Building Society chief executive Colin Seccombe said: "The position is that not only are we not in ‘advanced talks’, we’re not in any talks with them. There is absolutely nothing going on with the Skipton.

"We have no desire to seek a merger with them. We would not be receptive to an approach.

"It is well reported the difficulties that we had with the Icelandic banks. But we are coming out of that; we are now a very well capitalised society and our retail funding position is strong. We have been inundated at the weekend with enquiries about our new ISA product.

"The business continues to perform well. There is no real need why we would need a merger, let alone seek a merger."

A spokeswoman for the Skipton also refuted the reports. "It is not true – there is no substance to it. Our position is clear – it is not true," she said.

Former Newcastle Building Society managing director Bill Midgley said that any attempt to take the society out of the region would be bad for the North East.

He said: "The Newcastle has always put a lot back into the community through charities. That would be a loss to the region."