Jeremy Gray, chief executive of South London YMCA, said Earls Court YMCA, which runs a 24-bed hostel for homeless young people in west London, will retain its name and brand and all its services will continue as normal.
South London YMCA provides more than 400 beds in supported housing and a foyer in the south London boroughs of Croydon and Lambeth.
Gray said Andrzej Wdowiak, chief executive of Earls Court YMCA, had become an area manager for South London YMCA after the merger.
There would be no redundancies and recruitment would soon begin for vacant posts, said Gray.
He said eight of Earls Court’s trustees would stand down and the remaining one, Richard Howgego, would be joined by two trustees of South London YMCA to form a new Earls Court board of three people. Howgego will also join South London YMCA’s board.
The merger comes after a consultation on the future of Earls Court YMCA, which began in September 2012 and concluded that its best option was to merge with a neighbouring YMCA.
Gray said: "Earls Court YMCA recognised that if it was to grow and develop its interest would be better served by linking up with an additional organisation. It was done from a position of strength. It has a very good reputation locally, has money in the bank and is doing well, but growing from that base is very difficult when the market is so competitive."
Earls Court YMCA’s spending exceeded its income by small amounts in the past three financial years, according to the Charity Commission’s website. But it also had £265,636 in cash in 2010/11, which more than covered the £40,906 gap between expenditure and income. Its income was £380,539 in the same year.
Gray said: "It could have carried on for quite a few years because it has money in the bank, but we have lots of quality systems that smaller organisations do not necessarily have. There are lots of benefits and opportunities to deal with that deficit."
The accounts said Earls Court YMCA had an average of eight staff in 2010/11. South London YMCA had 109 staff on average in 2011/12, according to its accounts.
In a statement, Wdowiak said: "The board and I are very excited about this new venture because we believe that by becoming part of a larger organisation we will be able to improve the quality of service we can offer. It will also enhance Earls Court YMCA’s work with young people in the local community."