KPMG forecasts building society consolidation

People in London finance jobs could be affected by growing consolidation within the sector, new estimates suggest.

According to professional services body KPMG, factors such as pressure from industry regulators could lead to more building societies being bought out or combined with another company.

Simon Walker, partner of KPMG Financial Services, said it is "inevitable" that merger and acquisition activity will increase in the sector over the next few years.

However, he told the Financial Times that this trend would not be wholly fuelled by losses created by the current economic downturn.

"Some societies think this is a great time to do a merger without having to pay windfalls," Mr Walker commented.

This comes after the Building Societies Association (BSA) reported that mortgage approvals in the UK rose to £1.8 billion in June 2009.

Although this is nearly one-third down on the figure recorded 12 months earlier, it is the highest number recorded during the year to date.

Brian Morris, head of savings policy at the BSA, said this shows that mortgage approvals are showing signs of stabilising.

Updated: 24 September 2009.
Categories: finance-and-accounting, market-and-industry-news.