Channel Island business review for Yorkshire

The Yorkshire, which recently merged with Chelsea Building Society, is now the UK's second largest mutual.

The Channel Islands operation is reported to have deposits worth nearly 800m.

The operation, based in Guernsey, has become less relevant following the Yorkshire's recent acquisition spree which also included the merger with Barnsley Building Society.

Earlier this year the Yorkshire posted an annual loss for the first time in its 146-year history.

The mutual fell into a 12.5m annual loss compared with an 8.3m profit the year before.

The Yorkshire said bad debt provisions, due to some borrowers struggling to pay their mortgages, hit 58.5m in 2009 compared to 24m in 2008 but it said the increase was "an appropriate step taken in response to the harsh economic conditions".

Chief executive Iain Cornish insisted that the reason the Yorkshire made a loss was because the society had protected its members from the effects of the recession.

He said that the mutual had saved its members 85m in additional interest payments in 2009 by not passing on the full impact of the base rate cuts.