The nature of this fraud is itself quite suspect. Chelsea lent millions on buy-to-let mortgages to people who 'self-certified.' Now they call this fraud and the management leave, but one has to think that this was really an epic fail of risk management on behalf of what was supposed to be a prudential institution.
Other players in the sector have simply loaned out far too much money in mortgages and now with no access to the wholesale markets are effectively in stasis as businesses. With low interest rates making savers hard to come by and hard to profit from, these institutions seemingly have nowhere to go.
Now an M&A advisory business is going to suggest they all merge to make one bigger business which might have more room for manoeuvre.
However, the canniest thing to do for the CEO's is to wait it out. Interest rates will not be low forever and rising house prices in the medium term will fix the poor quality aspects of their books. Now is a crazy time to panic, unless like Chelsea or Dunfermline you have been run by avaricious fools in the recent past who have destroyed the business.