Yorkshire Building Society’s takeover of Barnsley Building Society has been officially approved by the Financial Services Authority.

The transfer of engagements has been confirmed and the deal will be complete on New Year’s Eve.

Bradford-based YBS stepped in to rescue the Barnsley Building Society in October after the South Yorkshire firm identified possible losses of up to £10m deposited with failing Icelandic banks.

Although the Barnsley becomes part of YBS, it retains its name and eight branches. As the UK’s 34th largest building society, the Barnsley has assets of £376 million and 60,000 members.

YBS is the UK’s third largest society with more than 1.9 million members, 135 branches and total assets of more than £20 billion.

A spokesman for YBS said: “The merger is an extremely positive development for the future for members of the two societies which share a commitment to mutuality, staff and local communities.

“Recognising the strengths of the Barnsley Building Society brand and the loyalty of its members, the Barnsley name and branches will be retained.

“Yorkshire will seek to retain as many of the Barnsley staff as possible, particularly as many will consider the distance between the two head offices as commutable. If redundancies do become necessary it is intended that these will be dealt with wherever possible on a voluntary basis.”