STROUD & Swindon Building Society has agreed to merge with the UK’s third largest building society The Coventry.

The merger, which is subject to the approval of Stroud & Swindon’s eligible members and confirmation by the Financial Services Authority, is expected to become effective on September 1.

According to a company statement released today, Tuesday, March 23, the responsibilities of Stroud & Swindon’s HQ in Rowcroft, Stroud, which employs more than 400 people, will be transferred to Coventry over an 18-month period following the merger date.

However, it added that its branch network of 22 offices and 21 agencies will be maintained without closures for at least 12 months from the merger date and that there will be no redundancies among branch staff as a result.

A meeting of members eligible to vote on the merger is scheduled to be held on Wednesday, June 16.

Stroud MP David Drew, who met with the society’s chief executive and chairman on Thursday, March 18, said he was surprised the amalgamation did not take longer to materialise.

He also urged eligible members to think hard about the implications of the merger, namely the loss of jobs in Stroud and the future of the society’s purpose-built head office.

Today’s merger confirmation as been announced separately to the news that Stroud & Swindon recorded a pre-tax loss of £5.8 million for the year ending December 31, 2009, due to the low interest rate environment and difficult economic conditions.

Both societies were quick to add that no bonus payments will be paid to either members, directors or officers as a result of the merger.

Current Stroud & Swindon members will have access to the enlarged society’s 91 branches and agencies across The Midlands and the South West within a year of the merger date.

Two thirds of accounts held by savings members are expected to receive an increase in their existing rate, matching equivalent variable rates offered by The Coventry, and more than a quarter of borrowing account holders will benefit from reduced mortgage repayments as they move into The Coventry’s lower SVR – currently at 4.74 per cent.

Stroud & Swindon savers with additional Coventry accounts will also receive separate protection of up to £50,000 per individual until December 30 this year under the Financial Services Compensation Scheme.

John Sutherland, chief executive of Stroud & Swindon, said: "Today’s announcement is excellent news for our members who have the opportunity to join one of the UK’s strongest and most profitable building societies.

"In considering a number of options, we believe that Coventry’s commitment to long term member value, fairness, strategic prudence and local communities, provides Stroud & Swindon’s members with the best possible future.

"We strongly recommend Stroud & Swindon’s members to vote in favour of the merger."

The SNJ has been invited to a press conference at Stroud & Swindon’s HQ today, Tuesday, so keep checking the website for updates on this story.