Up to 32,000 members of the former Barnsley Building Society, which was taken over in the financial crisis by fellow mutual Yorkshire, could receive windfalls averaging about £200 each following the recovery of millions of pounds of funds held with collapsed Icelandic banks.
A payout would be the first windfall for a society’s savers and borrowers since early in the credit crunch, when members of the one-branch Catholic pocketed cash bonuses of between £100 and £500 as a result of its takeover by Chelsea Building Society.
Yorkshire said that indications were that between £5m and £8m of Barnsley’s exposure to Icelandic banks could be recovered, and the society is expected to decide on any distribution of funds later this year.
Andy Caton, corporate development director at Yorkshire, said that because the society had stated at the time of the takeover in 2008 that it intended to make a payment of recovered funds to Barnsley members, it was “obviously pretty morally committed”.
However, there is no guarantee of a windfall, he said, and a distribution would need to be “prudent, capital-wise”.
To be eligible for any payout, savers and borrowers will need to have been Barnsley members when the merger was announced in October 2008 and remain members of the Barnsley or Yorkshire up to the date of the payout.
A distribution is likely to be welcomed by qualifying Barnsley members, but may raise questions among former members of Chelsea, which is merging with Yorkshire. Chelsea’s 700,000 savers and borrowers are not being offered any windfalls.