Chelsea and Catholic Building Societies to merge

7 June 2008

The boards of directors of Chelsea Building Society and the Catholic Building Society have agreed in principle that the two societies should merge. Under the proposal the Catholic would transfer its engagements to Chelsea on a date to be determined.

Discussions between the two societies are continuing and further details of the proposed transaction will be announced in due course.

It is likely that bonus payments will be made to members of the Catholic. In this event, the first qualifying date for such bonuses will be 31 May 2008. This means that only those shareholding and borrowing members who had a qualifying savings or mortgage account open with the Catholic on that date will be eligible to receive bonuses.

Trevor Harrison, Chelsea's Chairman, said "We are looking forward to finalising the terms of the transaction with the Catholic and to welcoming the Catholic's members into the Chelsea family in due course." Clare Whittaker, Catholic's Chairman, said "We are delighted to have chosen Chelsea as our merger partner. The Catholic and Chelsea have much in common and share common values around mutuality and people".

Notes

1. Chelsea Building Society is the country's fifth largest building society with assets in excess of £13 billion.
2. Catholic Building Society is the fifty-seventh largest society and had assets of £44 million at the end of 2007.
3. Any merger will be subject to the approval of the Catholic members and confirmation by the Financial Services Authority.

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