Nationwide has confirmed that it is to merge with the Cheshire Building Society and the Derbyshire Building Society.

The 925,000 combined members of the Cheshire and Derbyshire institutions will join the UK's largest building society.

As well as this, the merger will create a society with assets of more than £191 billion and £122 billion of retail deposits.

Graham Beale, Nationwide's chief executive, said: "The mergers will further enhance Nationwide's position as the leading UK building society."

Both of the smaller building societies approached Nationwide in separate attempts to secure financial security.

Nationwide stated that it recognises the benefits of the merger and will retain the brands and branch networks of the two building societies.

The Cheshire Building Society and the Derbyshire Building Society are set to announce losses of £10.5 million and £17 million respectively for the first half of the year.

Meanwhile, the Building Societies Association has welcomed the move, claiming it will improve the stability of the sector.