May 29, 2024

Q&A on Nationwide’s £2.9bn Virgin Money deal: What it means for 24m customers

The move took the City by surprise and is set to catapult Nationwide into second place in the mortgage and savings market

The planned takeover will bring together Britain’s fifth and sixth largest retail lenders (PA Wire/PA Images)

What does Nationwide’s move to take over Virgin Money mean for UK banking?

Nationwide Building Society has surprised everyone with a proposed £2.9 billion takeover of smaller rival Virgin Money. This will make Nationwide a big playerer in the mortgage and savings market. Let’s look at why this deal might happen and what it means for people who use banks.

– What does this mean for UK banking?

The planned takeover will join together Britain’s fifth and sixth biggest retail lenders. This would create a group with about 24.5 million customers, more than 25,000 staff and nearly 700 branches. This would give Nationwide more power to compete with its big four banking rivals Lloyds, NatWest, HSBC and Santander.

Together, Nationwide and Virgin Money would have total assets of more than £366 billion and lending and advances of about £283.5 billion. This would make the merged group the second biggest provider of mortgages and savings in the UK.

– What will happen to the Virgin Money brand?

The Virgin Money brand is set to eventually disappear from UK high streets. Nationwide said it would keep the Virgin Money brand at first, but revealed it plans to change the business name to Nationwide within six years once the proposed takeover is done. The deal that will see the listed bank taken private. The move will reduce the number of banking brands available to customers and remove another company from the London stock market.

Nationwide said the deal would help it to “accelerate its strategy and broaden and deepen its products and services faster than could be achieved organically”. Virgin Money said becoming part of Nationwide “would expand our customer offering and complete our journey in the banking sector as a national competitor”.

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