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Banking industry

Halifax Takes Over Birmingham Midshires Building Society, Promises $750 Windfall for Members

Strategic Insights

— 2 min read

The takeover of Birmingham Midshires Building Society by the Halifax Bank is expected to bring a significant boost to the economy, with each of the society's one million members set to receive an estimated windfall of $750. The Halifax, which has reported half-year profits of $843 million, is paying $750 million for the Wolverhampton-based society, and has promised to keep the Midshires name over its 115 branches for at least three years. The takeover is the latest in a series of deals that have seen building societies give up their mutual status, with the Halifax stating that it plans to expand the business. Analysts believe that the Halifax was able to offer more for Midshires than Royal Bank of Scotland because it could eventually close some of the society's branches and merge administrative functions.

Key Takeaways:

  • The Halifax is taking over Birmingham Midshires Building Society, with each of the society's one million members set to receive an estimated windfall of $750.
  • The takeover is worth $750 million, with the Halifax paying $750 million for the society.
  • The Midshires name will remain over the society's 115 branches for at least three years.
  • There will be no compulsory redundancies among the society's 2000 staff during that time.
  • The takeover is the latest in a series of deals that have seen building societies give up their mutual status.
  • The Halifax plans to expand the business, with analysts believing that it will eventually close some of the society's branches and merge administrative functions.
  • The Halifax has reported half-year profits of $843 million, up from $802m a year ago.
  • The society's chairman, John Leighfield, will join the board of the Halifax as a non-executive director.
  • The chief executive of the Midshires, Mike Jackson, has announced that he will step down next month, to be succeeded by Ian Kerr.

Statistics:

  • $750 million: The value of the takeover deal.
  • $750: The estimated windfall for each of the society's one million members.
  • $843 million: The Halifax's half-year profits.
  • 115: The number of branches that will retain the Midshires name for at least three years.
  • 2000: The number of staff at the Midshires who will not face compulsory redundancy.
  • 1.5: The percentage of the mortgage market that the Midshires has.
  • 1.5: The percentage of the mortgage market that the Halifax has.

Sources:

  • [THE London Evening Standard, Wednesday, August 19, 1998, page 2]
  • [Financial Times, Wednesday, August 19, 1998, page 1]

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