Sept. 7 (Bloomberg) -- Nationwide Building Society, the U.K.'s biggest customer-owned lender, said it's in ``advanced discussions'' with the Derbyshire Building Society and the Cheshire Building Society.

The talks are centered on the terms of ``independent and proposed mergers'' with the two smaller rivals, the Swindon, England-based company said in an e-mailed statement today. No financial details were given.

A merger with the Cheshire and the Derbyshire would give Nationwide an additional 95 branches in north-west and central England, according to data on the companies' Web sites. The Nationwide currently operates in more than 900 locations in the U.K., according to its Web site.

Nationwide's fiscal full-year profit rose 6.8 percent to 495.3 million pounds ($874 million), bolstered by its acquisition of the Portman Building Society in Aug. 2007, the company said May 22. That purchase is set to deliver cost and revenue benefits of 90 million pounds a year by 2009 to 2010, Nationwide said.

Nationwide said Aug. 18 that it was also planning to expand into Ireland to take advantage of ``funding opportunities'' in the country. An Irish operation will allow the society to access funding from the European Central Bank, which it cannot presently access because it has no euro zone operations, the Financial Times reported Aug. 18.

Multiple Mergers

Telephone calls to Derbyshire Building Society spokesman Rob Hill weren't immediately returned today. Calls to Julie Mazzei, a spokeswoman for the Cheshire Building Society, were also not answered.

Kirsty Clay, a spokeswoman for the Financial Services Authority, declined to comment when contacted by Bloomberg News.

Macclesfield, England-based Cheshire Building Society, which was established in 1870, employs 800 people and is the product of 13 mergers, according to its Web site. Derbyshire Building Society, based in Duffield, England, reported profit after tax of 8.7 million pounds in 2007 and gross lending of 1.8 billion pounds.

Nationwide is being advised by Morgan Stanley over possible mergers with smaller rivals, the Sunday Telegraph reported earlier today.

To contact the reporter on this story: Mark Herlihy in London at mherlihy1@bloomberg.net

Last Updated: September 7, 2008 08:42 EDT