Nationwide to snap up smaller societies

8 September 2008

Nationwide, the UK’s biggest building society, is to merge with smaller rivals, the Cheshire and Derbyshire building societies, to create a super-mutual.

Following the merger, Nationwide’s assets will exceed £191 billion and its dominance in the building society sector will be heightened. In comparison, the UK’s second largest society, Britannia, only has assets of £32.3 billion.

In 2007, Nationwide merged with the Portman, a deal that saw the brand and business of the latter completely taken under the Nationwide name.

However, unlike the Portman deal, members of Derbyshire and the Cheshire will not be required to vote on whether the merger goes ahead or not and they will not benefit from any monetary payouts.

Derbyshire is the UK’s ninth biggest mutual, with assets of £7.1 billion, 50 branches and 485,000 members, while the Cheshire is the 11th with assets of £4.9 billion, 45 branches and over 440,000 members.

This latest merger, which is likely to complete by the end of 2008, will see the smaller mutuals retain their brands and branch networks in recognition of their local strengths.

Once merged, Nationwide will gain an addition 925,000 members assets totalling more than £191 billion and £122 billion of retail deposits.

It says the move is “prudent and pre-emptive” in light of financial pressures facing the two societies.

Graham Beale, Nationwide's chief executive, says: "The Derbyshire and The Cheshire have independently concluded that a merger with Nationwide is in the best interests of their savers and borrowers given the financial issues faced by both societies.

“We look forward to welcoming The Derbyshire and The Cheshire members to Nationwide as part of the UK's largest building society."


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