Chesham a victim of Landsbanki's collapse

London: The world's oldest building society is set to disappear from the High Street forever after becoming the latest victim of the Icelandic banking crisis.

The Chesham, founded in 1845, yesterday announced it was to merge with Britain's fourth biggest building society, Skipton.

With assets of just £230 million (Dh1.3 billion), the Chesham had suffered a loss of £1.9 million in its last results after losing £3 million invested in Heritable Bank, part of failed Landsbanki.

Compensation scheme

It has also had to cope with an estimated £490,000 bill for the Financial Services Compensation Scheme.

The merger with Skipton, which will take effect on June 1 if approved, will see the Chesham gradually disappear.

Existing savings accounts will keep the Chesham name until customers close them, while its three branches will remain open for at least 12 months.

There will be no compulsory redundancies. The Chesham has 21,000 members, of whom 2,000 are mortgage borrowers. They will be able to use Skipton branches after the merger.

Bankruptcies rise 26% in January

Iceland's economy is still under big pressure from its debt payment default last year. According to the website of Statistics Iceland bankruptcies in January went up 26 per cent with 92 companies going bust. The sector worst hit was construction.

However, the statistic report also states that 157 new private limited companies were registered last month. But even the new company formations were down 30 per cent compared to last year.

Most of the new companies were in the sectors of retail and care repair. Other new businesses were founded in health care and social services.