Lambeth and Portman to merge

RNS Number:3155Z
Portman Building Society
06 March 2006

                                 PRESS RELEASE



           Lambeth Building Society announces decision to merge with

                            Portman Building Society



The Directors of Lambeth and Portman Building Societies today announced that
they have agreed to a merger. Subject to approval by members of Lambeth, and
confirmation by the Financial Services Authority (FSA), this is expected to be
effective on 30th September 2006.


Although some details are still to be finalised, the key points are:


*     The enlarged building society will remain a mutual, owned by its members,
and will be named Portman Building Society.


*     Lambeth and Portman operations are geographically complementary. The
merger will significantly improve the distribution of products and services to
members of Lambeth.


*     Under the proposed merger, Robert Sharpe, Chief Executive of Portman
Building Society will be Chief Executive of the enlarged society. Richard
Vaughan, Chairman of Lambeth Building Society will join the Portman Board.


*     A local board will be established, comprising the existing non-executive
Directors of Lambeth Building Society and the Chief Executive of Portman. The
local board's primary function will be to oversee integration. Chris Radford,
Chief Executive of Lambeth Building Society, will be appointed Director of
Integration.


*     There will be no compulsory redundancies within the branch network as a
direct result of the merger. Portman will also offer jobs to all Lambeth's head
office staff at Portman's main offices in Bournemouth or Wolverhampton, together
with relocation benefits. Those head office staff unable to make a move to
either of these locations will receive generous redundancy compensation.
Lambeth's head office is expected to close by 30 June 2007.


*     The majority of Lambeth's branches will be incorporated into Portman's
network to enhance the service offered to members of the enlarged society. The
branches at Ashford, Brixton, Orpington, Sutton, Tonbridge and Upminster will be
retained. To avoid local overlap, Lambeth's branches in Bromley and Woking,
where Portman already has established branches, will be closed and the head
office branch at Westminster Bridge Road will be relocated if suitable
alternative premises can be found in the local vicinity.


*     A merger bonus will be paid to qualifying borrowers and savers of Lambeth
Building Society. Each eligible member of Lambeth is expected to receive a
taxable merger bonus of at least #400, although details are yet to be finalised.


Commenting on the proposed merger Chris Radford, Chief Executive of Lambeth said
"This is an exciting and important decision for Lambeth Building Society which
we believe allows our members to continue to benefit over the long term from
competitive products supported by excellent service and a wider branch network
in the South of England. Lambeth is a sound business, with excellent staff and a
strong balance sheet. We believe that the proposed merger with Portman can only
increase our competitiveness in the market and allow our members to benefit from
market-leading products and services."


Robert Sharpe, Chief Executive of Portman commented:  "We are delighted that
Lambeth has chosen Portman as its merger partner.  Whilst there is no doubt that
small and medium-sized building societies are able to trade profitably, we all
operate in an increasingly challenging market environment.  The growing costs of
regulation, the requirements of Basel II and the expenditure needed to invest in
ever more sophisticated technology together make a compelling case for this
merger.


Members of both societies can, in our view, only benefit from this merger.  The
enlarged society's economies of scale and wider distribution will generate
tangible benefits in terms of products and pricing."


                                    - Ends -



Editors Notes

It is expected that eligible savers and borrowers of Lambeth will receive full
details of the proposed merger towards the end of April together with details of
the merger bonus arrangements.  Bonus payments to eligible savers will be based
on the lower of account balances at the close of business on 31 January 2006 and
a future date which will be disclosed in the merger booklet.  A minimum savings
balance as at 31 January 2006 of #100 will be one of the requirements.  Details
of the merger bonus for eligible borrowers will be disclosed in the merger
booklet, but a minimum mortgage balance at 31 January 2006 of #100 will be one
of the requirements.  Payment of the merger bonuses is dependent upon the
approval of the merger by Lambeth's members and confirmation of the merger by
the FSA.


About Portman


Portman is the third largest UK building society and 13th largest UK mortgage
lender.  In the five years since 2000, Portman has more than doubled in size.
During this period Portman was the fastest growing top ten building society in
terms of total assets.


The Group has total assets of #17.8 billion and employs over 2,300 staff,
serving 1.8 million members.


The Society has a network of 143 branches.  Its Head Office is in Bournemouth,
Dorset and it has an administration centre based in the West Midlands.


Readers requiring further information about any of the products or services
offered by Portman Building Society should visit their local Portman branch or
call 0845 60 90 600.  Details are available at www.Portman.co.uk.


About Lambeth


Lambeth is currently the 20th largest building society in the UK, with assets of
#1 billion.  Based in the south of London, Lambeth Building Society has 9
branches and currently employees around 130 staff.  In the past 5 years, Lambeth
has focussed on providing a range of competitive mortgage and investment
products and during this time has almost doubled its assets.


Members requiring further information about this proposed merger, should call
0845 6000913.


For further information, please contact:


For Portman Building Society

Helen Shaw, Group Communications Manager    01202 562256 / 07887 830123
Robert Sharpe, Chief Executive              01202 563602 / 07887 830011



For Lambeth Building Society

Laura O'Connell
Director, Wriglesworth Consultancy          020 7845 7900 / 07887 737463




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

MERUUUAAWUPQGQA