Customer Questions & Answers about SCIL
Published on 20 April 2007
Q1 What is happening?
The Scarborough Building Society Group (‘Scarborough’) has completed its acquisition of the entire share capital of the former Portman Channel Islands Limited (‘PCIL’), which means that the ownership of PCIL has transferred from Portman Building Society (‘Portman’) to Scarborough. The business will now trade as Scarborough Channel Islands Ltd (SCIL).
SCIL continues to be based in the Bailiwick of Guernsey and is now a wholly owned subsidiary of the Scarborough Building Society Group. SCIL is regulated by the Guernsey Financial Services Commission.
SCIL employs 11 people and will continue to operate largely as a standalone business with support from the Scarborough Group.
Q2 What kind of security will Scarborough provide for investors’ money?
Scarborough is providing a parental guarantee in respect of Scarborough Channel Islands Limited’s liabilities, which replaces the parental guarantee from Portman Building Society from the date of completion.
Q3 What are SCIL’s future plans now that it is part of the Scarborough Group?
SCIL has ambitious plans for building upon its proven track record of success to date, with the existing staff team playing an important role in the process of expanding and developing the business.
Plans currently under consideration include using a blend of competitive pricing; product innovation and the development of new markets to further enhance SCIL’s offering. These include the launch of a competitive new Guaranteed Equity Account, on 30 April. Further details of this product are available from the SCIL website at www.scarboroughci.com.
Q4 What does this acquisition mean for the Scarborough Group?
SCIL is a natural strategic fit with our existing Scarborough strategy of growth and diversification and complements the Scarborough Building Society Group’s other subsidiary companies
The Scarborough Group was already considering entering the offshore savings market as part of plans to diversify its retail strategy, and therefore acquiring an existing offshore business represented an excellent opportunity to enter this arena quickly.
The acquisition of what is now SCIL will further boost the rapid evolution of the Scarborough Group, already a dynamic, successful and forward-thinking organisation. It will also further enhance the Group’s profitability, supporting Scarborough’s core ethos of providing value to its members – as well as enabling it to continually enhance the excellent service it offers to customers.
Q5 When was the transaction completed?
The transaction was completed on 20 April after securing the necessary regulatory approvals.
Q6 Why did Portman decide to sell the offshore business?
The decision was made following a strategic review by Portman, which was announced in November last year and included consideration of the option of retaining the offshore business as part of the Portman Group. The decision to sell the subsidiary was made because offshore deposit taking has become less of a strategic imperative and is no longer core to the Portman Group’s activities, given its strength in attracting retail funding from onshore sources.
Q7 Why did Scarborough decide to buy the offshore business?
The Scarborough Group’s expanding mortgage lending and trading activities have increased the requirement for funding. Setting up an offshore business was just one of the strategic options we were considering and this opportunity came along at the right time. The decision to buy the business followed a period of extensive evaluation and due diligence by both the Group’s senior management and our external advisers.
The purchase is complementary to our other subsidiary activities and is good news for staff and customers of what is now SCIL – who will no doubt appreciate the benefits and security of the business remaining in the building society sector.
The future prospects of the SCIL business, and the offshore market in general, present very real opportunities and the existing Guernsey-based team are looking forward to developing new products and service offerings which will appeal to existing customers and attract new ones.
Q8 I thought the business was performing well. Was this not the case?
The offshore subsidiary is a successful business which has performed well over the past 5 years, with growing deposits and earnings and a high quality customer base.
In the year ended 31 December, 2006, it delivered pre-tax profit of £2.1 million and this is considered to be a good performance from which to further develop the business.
Portman decided to exit the offshore market for strategic reasons, as described in the answer to question 6.
Q9 Can Scarborough Building Society customers open an account in Guernsey?
Yes. SCIL accounts can be opened by UK residents, as well as UK expatriates and other nationalities living overseas.
Q10 Will there be any staff redundancies as a result of the transaction?
No. All Guernsey-based employees will continue in their existing roles working for SCIL, and as such will be instrumental in the development and expansion of the business. There will be no impact on existing Scarborough staff.
Robin Litten, Scarborough’s Finance Director, and Andrew Holmes, Operations Director & Secretary, will replace the two Portman Building Society Directors on the SCIL Board, as non-executive directors.
Q11 What is the Scarborough Group and can it look after my money and me as a customer?
Established in 1846, Scarborough is the UK’s 18th largest building society, with a strong track record and considerable experience in the financial services sector. This rapidly evolving, dynamic business will have assets under management of over £4 billion following this acquisition. The Scarborough Building Society Group is made up of Scarborough Building Society (SBS); Scarborough Mortgage Services (SMS), which administers mortgages for major clients and North Yorkshire Mortgages (NYM). NYM is the Group’s mortgage asset trading company and includes the Scarborough Specialist Mortgages (SSM) brand, which offers non-conforming and specialist mortgages.
SBS has a network of 9 branches in Yorkshire, Lincolnshire, the East Midlands and the North East. Its contact centre, Scarborough Direct, offers telephone and postal account services throughout the UK. The Society has 160,000 customers.
The SBS Group employs over 300 people and has modern, purpose built offices on the outskirts of Scarborough, North Yorkshire. SSM also has an administrative office in the centre of Leeds, West Yorkshire.
Q12 Why were Scarborough Building Society members not asked to vote on the transaction?
There was no requirement for Scarborough Building Society members to vote on the transaction. Our members vote on the election or re-election of Directors of Scarborough. The Board of Directors of Scarborough are responsible for the day-to-day management of Scarborough Building Society and its subsidiaries.
The purchase of our new offshore subsidiary was a matter for the Board of Directors of the Scarborough Building Society Group to approve. They did so believing this to be in the best interests of the business and its building society members.
Q13 As a customer of SBS, will I receive a windfall or bonus payment as a result of the transaction?
There will be no bonus or windfall payments as a result of this transaction, which is entirely normal given its nature.
Q14 What will happen to any existing offshore accounts?
Other than the change of name to Scarborough Channel Islands, there will be no changes to the terms and conditions of your PCIL account and you should continue to operate your account as normal.
Q15 What will happen to any existing SBS accounts?
Your Scarborough account is not affected in any way by this transaction.
Q16 Can I expect SCIL to offer me new and competitive account options in the future?
SCIL has ambitious plans to expand and develop this already successful business through competitive pricing and new product development.
Going forward, it plans to use a blend of competitive pricing; product innovation and the development of new markets to reward existing customers and attract new ones in order to boost SCIL’s future success.
Q17 If I wish to close my existing notice account or bond as a result of the sale of the offshore subsidiary, can I do so without giving notice and without penalty?
No. Normal terms and conditions will apply to all existing accounts and bonds until further notice. However, given that your account will be unaffected by the change of ownership, we hope that you will retain your account following the sale.
Q18 I’m a customer of SCIL, formerly PCIL. What do I need to do now?
You need take no action. You should continue to operate your account as normal. Over the next few days, you will receive a letter welcoming you as a customer of SCIL.
Q19 Where can I obtain further information about the transaction?
SCIL is writing to former PCIL customers to confirm that the transaction has been completed. In the meantime, should you have any further questions, please contact the SCIL team on 01481 712004 or via email at info@scarboroughci.com.
Scarborough customers who have any further questions, or offshore customers who wish to contact Scarborough, should call Tracy Fletcher on +44 (0)1723 504219.
- Scarborough Channel Islands Limited is licensed under the Banking Supervision (Bailiwick of Guernsey) Law, 1994 as amended.
- Scarborough Channel Islands Limited Registered office is Suite 5 North, Town Mills, Rue du Pre, St Peter Port, Guernsey, Channel Islands, GY1 3TR. Registered in Guernsey No. 25871.
- Scarborough Channel Islands Limited is a wholly owned subsidiary of Scarborough Building Society, which is authorised and regulated by the Financial Services Authority (Register Number 206062).