Up to five UK building societies could be pushed into mergers over the next couple of years because of continuing losses and regulatory pressure, predicts KPMG, the professional services firm.

'More consolidation is inevitable,' said Simon Walker, partner of KPMG Financial Services, whose Building Societies Database 2009, an annual review, is published today.

'Although the days have gone when a society suffering a loss had to merge, long-term profitability is essential to survival.'

Five of the biggest societies made losses in 2008, according to the database, while there have already been seven mergers and takeovers in the sector since the summer of 2008, when there were 59 mutual lenders.

Financial Times