Nationwide's Portman merger

By MICHAEL CLARKE
Updated:

 

NATIONWIDE and Portman building societies have unveiled shock plans to merge in a £150bn deal.

nationwide

The merger will create the UK's largest mutual organisation and bring millions of customers under one roof.

The move will create a windfall of at least £200 for thousands of Portman customers, but Nationwide customers will receive nothing.

Portman only recently completed its own merger with the Lambeth Building Society. Lambeth customers are set to receive windfalls of up to £2,500 when that deal is finalised at the end of the month.

A Nationwide spokesman said Portman members were being given a windfall to compensate for mutual membership, but its own customers would benefit from a larger, more cost effective group.

The building society also confirmed that former Lambeth customers will also enjoy a bonus.

The new group will retain Nationwide's name, with Nationwide's current finance director Graham Beale taking the chief executive's role of the enlarged group.

It is expected the deal will be completed by the end of September next year and until then the two companies' existing chief executives – Philip Williamson at Nationwide and Robert Sharpe at Portman - will remain in place. Sharpe will retire once the merger is complete, while Williamson plans to quit before the close date.

The enlarged group will have a branch network of more than 880 locations and 13m customers in the UK. It will be the second-largest mortgage lender and retail savings provider in the UK and both companies said the move would allow it to compete with the major High Street banks.

It should also open up the array of products for customers of both societies. At present Portman doesn't offer current accounts or credit cards, while Nationwide customers will have access to Portman's range of wealth management and financial planning services.

Nationwide is currently the UK's largest mutual building society, while Portman is the third-largest.

Robert Sharpe, chief executive of Portman, said: 'This important decision to merge two of the largest and most successful UK building societies will create an organisation of formidable strength and size.

'If building societies are to continue to compete successfully with the retail banks, they need to enjoy comparable economies of scale.'

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Philip Williamson, Nationwide's chief executive said: 'As a result of the merger, 13m people will be members of a bigger and even better society, offering market leading products and pricing, underpinned by a strong commitment to mutuality.

'We are really looking forward to welcoming customers and employees of Portman to the world's number one building society, which will be the second largest mortgage lender in the UK and will reinforce Nationwide's present position as the second largest provider of retail savings.'

Both companies have said they will retain their head offices. Nationwide's Swindon's base will be the group's main headquarters, while Portman's Bournemouth branch will be a 'key business centre'.

However, the companies admitted that some branches may be closed where there is an overlap.

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