Nationwide Building Society

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Nationwide Building Society
Building society (Mutual)
Industry Banking and Financial Services
Founded 1846 (earliest components)
Headquarters Swindon, Wiltshire, England
Key people
 Geoffrey Howe, Chairman
Graham Beale, Chief Executive
Products Retail banking, Savings
Mortgage loans, Investments, Insurance, Current accounts, Loans, Home insurance, Travel insurance, Credit cards
£3.2 billion GBP (Period ending 2014)
Total assets £195.6 billion GBP (2014)[needs update]
Number of employees
 15,000
Slogan "On Your Side"
Website www.nationwide.co.uk

Nationwide Building Society is a British mutual financial institution and the largest building society in the world. It has its headquarters in Swindon, with an office in Threadneedle Street, London, and with administration centres based in Bournemouth, Northampton and Dunfermline.

Made up of over a hundred mergers — most notably its merger with Anglia Building Society in 1987 and Portman Building Society in 2007 — Nationwide is now the second largest provider of household savings and mortgages in the UK. It also has a 6.8% market share of current accounts and has had the highest customer satisfaction rating of any UK high street financial service provider for over three years - at 94%.[1]

In 2013, Nationwide had assets of around £193.3 billion[2] compared to £325 billion for the entire building society sector,[3] making it larger than the remaining 44 British building societies combined.[needs update]

It is a member of the Building Societies Association, the Council of Mortgage Lenders and Co-operatives UK.[4]

History

Nationwide Building Society's head office in Swindon, Wiltshire

The Society's origins lie in the Northampton Town & County Freehold Land Society (1848) and the Southern Co-operative Permanent Building Society, London (1884).

The Co-operative Permanent changed its name to Nationwide Building Society in 1970, reflecting an organisation that had coverage throughout the country. The new name was put to a member vote, with members voting 135,675 to 15,585 in favour.[5]

In 1987, the Northampton-based Anglia Building Society merged with Nationwide. The new society was known as Nationwide Anglia Building Society at first, but the Anglia name was dropped in 1992.

Nationwide launched the UK's first internet banking service on 27 May 1997.[6]

In 1999, Nationwide, together with various UK tabloid newspapers and media, launched a campaign against controversial cash machine fees. The campaign reached a peak when Barclays Bank announced a plan to charge all customers of rival banks and financial providers, including those of Nationwide, £1 for every cash machine withdrawal made from a Barclays-owned cash machine. This prompted Nationwide to warn Barclays that it would take legal action against the bank if it did not back down. Nationwide claimed Barclays had broken the rules of the LINK network of cash machines, which the bank had joined earlier in the year. The following year, withdrawals from most cash machines owned by UK banks were made free for customers of all banks and building societies throughout the UK.

Nationwide completed a merger with Portman Building Society on 28 August 2007, creating a mutual body with assets of over £160 billion and around 13 million members. Portman's earliest component was the Provident Union Building Society founded in Ramsbury, Wiltshire in 1846.

In the financial crisis of 2007–2010, the Nationwide acted to safeguard the mutual sector, acquiring the ailing Cheshire and Derbyshire building societies in September 2008,[7] followed by the Dunfermline Building Society on 30 March 2009.[8]

On 24 March 2009 Nationwide opened a direct savings branch in Dublin, Ireland called Nationwide UK (Ireland), to distinguish it from the unconnected Irish Nationwide Building Society.[9]

Having operated under their own brands as divisions of Nationwide, in 2012 it was announced that the Cheshire, Derbyshire and Dunfermline building societies would be integrated into Nationwide. The rebranding of each business was phased, with the Dunfermline first to be merged in June 2014.[10][11] The Cheshire and Derbyshire followed in October and November 2014 respectively.

Mutual status

Nationwide is committed to staying mutual and is keen to emphasise that it has members rather than shareholders. However, it has had challenges against its mutual status in the past.

Nationwide was by far the largest British building society that did not convert to a bank in the wave of demutualisations that occurred from the late 1980s to the late 1990s.

In 1998, society members seeking a windfall, branded as carpetbaggers by the UK media, meant Nationwide members had to vote on whether to demutualise the society and float on the London Stock Exchange. The attempt failed, despite media reports of possible pay-outs to members of around £1,000 to £1,500 each, as Nationwide members voted by a narrow margin of 33,700 against converting the building society into a bank.[12]

Society carpetbaggers proposed a resolution in 2001 for another vote by Nationwide members to convert the society to a bank. The resolution was rejected by the Nationwide board on legal grounds.[13]

Controversies

In the wake of the financial crisis, executive pay practices came under increasing scrutiny at Nationwide as in the rest of the financial sector. The Building Society Members' Association began to campaign against acceptance of remuneration reports at AGMs in 2009,[14] and with the CEO's compensation rising 45% to £2.25 million by 2012[15] the board's levels of pay attracted criticism on This is Money,[16] and in The Guardian,[17] and The Huffington Post.[18]

Products and services

A branch of Nationwide in Southampton

Nationwide Building Society provides financial services both directly, and through around 700 branches. Nationwide is a major provider of both mortgage loans and savings in the UK, as well as personal banking such as loans, credit cards, bank accounts and insurance products. Nationwide.co.uk is the main website.

Financial performance

For the 2014/15 half year results (April-September 2014) underlying profits were up 83% to £606 million, while statutory profits rose by 113% to £598 million. Cost income ratio was down to 50.2%. Common Equity Tier 1 and leverage ratios improved to 17.6% and 3.8%. Gross and net lending were at £13.1 billion and £3.6 billion respectively. Nationwide helped 23,800 people buy their first home. Member deposits increased by £3.5 billion.[2]

Credit rating

Nationwide's long term credit rating, in February 2014, was A2 with Moody's, A with Standard & Poor's and A with Fitch Ratings.[19]

Subsidiaries

Nationwide also owns several subsidiary companies,[20] including:

  • Nationwide International Limited – offshore deposit taker
  • Nationwide Syndications Limited – syndicated lending
  • The Mortgage Works (UK) plc – specialised mortgage lender
  • UCB Home Loans Corporation Limited – specialised mortgage lender
  • Derbyshire Home Loans Limited – specialised mortgage lender
  • E-MEX Home Funding Limited – specialised mortgage lender

Key people

  • David Roberts - Chairman
  • Graham Beale - Chief Executive
  • Julia Dunn - Chief Compliance Officer
  • Iain Laing - Chief Risk Officer
  • Tony Prestedge - Chief Operating Officer
  • Mark Rennison - Group Finance Director
  • Chris Rhodes – Executive Director, Group Retail
  • Alison Robb - Group Director (People, Customer, Communications & Commercial)
  • Graeme Hughes - Group Director (Distribution)

See also

References

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External links

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