Nationwide Building Society is the largest retail bank in the United Kingdom,[2] and the world's largest building society, serving over 16 million members.[3] It operates as a British mutual financial institution, meaning it is owned by and run for the benefit of its members. Nationwide is also the seventh largest cooperative financial institution globally.[4] The Society's headquarters are located in Swindon, England.
Nationwide Building Society was established through the amalgamation of approximately 250 smaller building societies over its history. Among the most notable mergers were the acquisition of Anglia Building Society in 1987 and the Portman Building Society in 2007. As of 2022, Nationwide ranked as the second largest provider of household savings and mortgages in the UK, holding a 10.3% market share in current accounts.[1]:15
For the financial year 2021/2022, Nationwide had assets of around £272.4 billion[1]:57 compared to £483 billion for the entire building society sector,[5] making it larger than the remaining 42 British building societies combined.
The Society's origins lie in the Co-operative Permanent Building Society, founded in 1884. Based at New Oxford House, High Holborn, it changed its name in 1970 after deciding to leave the British Co-operative Union. The new name was put to a member vote, with members voting 135,675 to 15,585 in favour.[7]
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 1991.[8] In 1992, Nationwide moved its head office to Nationwide House, Pipers Way, Swindon. It had been operating a computer centre and administrative office in the town since 1974 and head office departments had been gradually migrating to Swindon.[citation needed]
Nationwide launched an early UK internet banking service on 27 May 1997.[9]
In 1999, Nationwide, together with various UK tabloidnewspapers and media, launched a campaign against controversial cash machine fees.[citation needed] 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.[citation needed] 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.[citation needed] 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.[citation needed]
2000 – 2010
In 2007, Nationwide members voted at its Annual General Meeting to donate at least 1% of pre-tax profits to charitable activities each year. 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.[10]
On 24 March 2009, Nationwide Building Society opened a direct savings branch in Dublin, Ireland called Nationwide UK (Ireland), to distinguish it from the unconnected and now-defunct Irish Nationwide Building Society.[13] It ceased all operations in the Irish Republic in 2017.
2010 – 2020
In 2012, the Society announced that it would integrate the Cheshire, Derbyshire and Dunfermline building Societies into Nationwide. The Societies had operated under their own brands as divisions of the Society. The rebranding of each business was phased, with the Dunfermline first to be merged in June 2014.[14][15] The Cheshire and Derbyshire followed in October and November 2014 respectively.
On 22 May 2015, it was announced that the Society's chief executive, Graham Beale, intended to retire. On 16 November 2015, Nationwide announced that Joe Garner, CEO of Openreach, would succeed Graham as Nationwide CEO in Spring 2016.[16] Joe Garner joined the Society as chief executive on 5 April 2016.
In May 2016, the Society confirmed that it would be closing its subsidiary on the Isle of Man, Nationwide International, following a review of its business.[17] The branch, based in Douglas, provided a range of offshore savings accounts in euro, pound sterling and US dollars. It held assets in excess of £2.76 billion as at 31 March 2008, increasing to £3.69 billion by 31 March 2009, making it one of the largest deposit takers in the Isle of Man. Nationwide confirmed it would close on 30 June 2017.[18]
On 1 October 2016, Carillion began providing services for Nationwide's headquarters in Swindon, 'specifically aligned to Nationwide's sustainability strategy'. This contract was expected to be worth approximately £350 million, building on an existing partnership of nearly nine years.[19] When Carillion went into liquidation in January 2018, Nationwide took on 297 staff previously employed by the contractor.[20][21]
In April 2017, the Society confirmed that it would be closing its subsidiary on the Republic of Ireland, Nationwide UK (Ireland), following a review of its business.[22] Its branch at 13 Merrion Row, Dublin 2 closed on 31 May 2017. The remainder of the business closed at the end of the year. Nationwide announced it would be building a new community at Oakfield in Swindon working in partnership with Swindon Borough Council. Planning permission for the 239 houses was granted in 2019. The homes will be EPC A rated and built on a not-for-profit model. In 2021 the development won the ‘Building for a Healthy Life’ prize as part of the Housing Design Awards.[23]
2020s rebrand and proposed acquisition of Virgin Money
In March 2022, Kevin Parry replaced David Roberts as chairman; and in June 2022, Debbie Crosbie, who had been CEO of TSB Bank, succeeded Joe Garner, as chief executive.[24]
In October 2023 Nationwide Building Society committed to its biggest rebrand since 1987, replacing its iconic ‘village icon’.[25] The move was part of a wider commitment to maintain a High Street presence as many banks continue to close branches.[26] The move will see all 605 branches receive investment to enable the building society to protect face-to-face customer interactions.[27][28]
On 7 March 2024 Nationwide announced that they had made an offer to buy Virgin Money UK for £2.9 billion.[29] Under the terms of the deal the resulting company would be rebranded under the Nationwide banner over the next 6 years with the Virgin Money brand eventually disappearing.[29] Nationwide intends to remain as a building society and for the "medium-term" the Virgin Money business would remain its own legal entity with its own banking licence.[29] Nationwide aims to not make any material changes to Virgin Money's 7,300 employees "in the near term".[29] Virgin Money currently issue Scottish bank notes under the Clydesdale Bank branding.[30]
Virgin Money's shareholders approved the deal on 22 May and it is expected to complete by the end of the year.[31] On 31 May, the Competition and Markets Authority said that they would be investigating the proposed merger regarding the potential lessening of competition within the banking sector in the UK.[32] On 19 July, the Competition and Markets Authority approved the acquisition.[33][34] On 1 October, Nationwide completed its acquisition of Virgin Money, meaning one in three people in the UK have a connection to Nationwide.[35][36]
Mutual status
Nationwide is committed to staying mutual and is keen to emphasise that it has members rather than shareholders.[citation needed] Its mutual status has been challenged.[citation needed]
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.[citation needed]
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.[37]
Society members again 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.[38]
Controversies
In the wake of the financial crisis of 2007–08, 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,[39] and with the CEO's compensation rising 45% to £2.25 million by 2012[40] the board's levels of pay attracted criticism in The Guardian,[41] and The Huffington Post.[42]
Nationwide has also had to pay out over £473 million of compensation to customers for the mis-selling of PPI.[43]
Nationwide had to scrap its intentions to pursue a digital business current account in April 2020, due to the effects of the COVID-19 pandemic. The society has said the pandemic has driven down the medium-term interest rates, which the society believes has made the project unviable.[44] Nationwide has committed to return the £50M grant from the Banking Competition Remedies scheme, which distributes funding that Royal Bank of Scotland was ordered to set aside as a condition of its 2009 bailout.[45] The project is estimated to have cost members £70 million, but Nationwide have said that all staff working on the project will be redeployed elsewhere.[46][47] It still provides some business savings accounts.[48]
When restrictions were lifted following the COVID-19 pandemic, Nationwide stated that its office-based staff could choose whether to work from home or return to the office.[49] In December 2023 the building society announced that employees would be required to come into the office for two days per week from April 2024.[50]
Products and services
A branch of Nationwide in Southampton
Nationwide Building Society provides financial services both directly, and through 686 branches (as of 2023). 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.
Financial performance
For the 2015/2016 Preliminary Results (April 2015–April 2016), underlying profits were up 9% to £1.337 billion, while statutory profits rose by 23% to £1.279 billion. Cost income ratio was 53.9%.[51] Common Equity Tier 1 and leverage ratios improved to 23.2% and 4.2%. Gross and net lending were at £32.6 billion and £9.1 billion respectively. Nationwide helped 57,200 people buy their first home. Member deposits increased by £6.3 billion.[52]
A building society is a financial institution owned by its members as a mutual organization, which offers banking and related financial services, especially savings and mortgage lending. They exist in the United Kingdom, Australia and New Zealand, and formerly in Ireland and several Commonwealth countries, including South Africa as mutual banks. They are similar to credit unions, but rather than promoting thrift and offering unsecured and business loans, the purpose of a building society is to provide home mortgages to members. Borrowers and depositors are society members, setting policy and appointing directors on a one-member, one-vote basis. Building societies often provide other retail banking services, such as current accounts, credit cards and personal loans. The term "building society" first arose in the 19th century in Great Britain from cooperative savings groups.
HSBC Holdings plc is a British universal bank and financial services group headquartered in London, England, with historical and business links to East Asia and a multinational footprint. It is the largest Europe-based bank by total assets, ahead of BNP Paribas, with US$2.919 trillion as of December 2023.
Northern Rock, formerly the Northern Rock Building Society, was a British bank. Based at Regent Centre in Newcastle upon Tyne, United Kingdom, Northern Rock was originally a building society. It demutualised and became Northern Rock bank in 1997, when it floated on the London Stock Exchange with the ticker symbol NRK.
The Co-operative Bank plc is a British retail and commercial bank based in Manchester, England. Established as a bank for co-operators and co-operatives following the principles of the Rochdale Pioneers, the business evolved in the 20th century into a mid-sized British high street bank, operating throughout the UK mainland. Transactions took place at cash desks in Co-op stores until the 1960s, when the bank set up a small network of branches that grew from 6 to a high of 160; in 2023 it had 50 branches.
Bradford & Bingley plc was a British bank with headquarters in the West Yorkshire town of Bingley.
EBS d.a.c. is a small financial institution in Ireland registered as a designated activity company.
The Portman Building Society was a mutual building society in the United Kingdom, providing mortgages and savings accounts to consumers and offering loans to commercial enterprises. Its head office was in Bournemouth and its administration centre in Wolverhampton. Portman merged with the Nationwide Building Society in August 2007, at which time it was the third largest building society in the UK and the largest regional building society in the south of England, with 154 branches and assets exceeding £15 billion.
Clydesdale Bank plc is a retail and commercial bank based in Scotland and now owned by Virgin Money UK. It was formed in Glasgow, Scotland, in 1838 and since 2019 mainly trades as Virgin Money.
Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world.
Virgin Money UK plc is a British banking and financial services company. It has been owned by Nationwide Building Society since 1 October 2024.
Norwich & Peterborough Building Society (N&P) is a trading name of Yorkshire Building Society based in Bradford, West Yorkshire. Formed by the merger of the Norwich and Peterborough building societies in 1986, at the time of merger with YBS, it was the ninth largest building society in the United Kingdom, with assets in excess of £4.9 billion.
The Coventry Building Society is a building society based in Coventry, England. It is the second largest in the United Kingdom with total assets of more than £62 billion at 31 December 2023. It is a member of the Building Societies Association. The society has over 1.6 million saver-members and a further 460,000 borrower-members.
The Dunfermline Building Society was a building society and later a trading division of Nationwide Building Society, based in Dunfermline, Scotland. Before its 2009 merger with Nationwide, it was the largest building society in Scotland and the 12th largest in the United Kingdom based on total assets of £3.3 billion at 31 December 2007. It was a member of the Building Societies Association.
In the period September 2007 to December 2009, during the Global Financial Crisis, the UK government intervened financially to support the UK banking sector, and four UK banks in particular.
In 2008 the Northern Rock bank was nationalised by the British government, due to financial problems caused by the subprime mortgage crisis. In 2010 the bank was split into two parts to aid the eventual sale of the bank back to the private sector.
Lloyds Banking Group plc is a British financial institution formed through the acquisition of HBOS by Lloyds TSB in 2009. It is one of the UK's largest financial services organisations, with 30 million customers and 65,000 employees. Lloyds Bank was founded in 1765 but the wider Group's heritage extends over 320 years, dating back to the founding of the Bank of Scotland by the Parliament of Scotland in 1695.
TSB Bank plc is a British retail and commercial bank based in Edinburgh, Scotland. It has been a subsidiary of Sabadell Group since 2015.
Virgin Money is a financial services brand used by two independent brand-licensees worldwide from the Virgin Group. Virgin Money branded services are currently available in Australia and the United Kingdom. The brand formerly operated in South Africa and the United States.
Starling Bank is a British bank, occasionally referred to as a digital challenger bank or neobank, providing current and business bank accounts in the United Kingdom. Starling Bank is a licensed and regulated bank, founded by former Allied Irish Banks COO, Anne Boden, in January 2014. Since its founding, it has received over £500M of funding.
↑ Nationwide Building Society (20 March 2014). "Regional Brands integration". Nationwide Building Society. Archived from the original on 16 November 2015. Retrieved 16 November 2015.
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£3.86 billion (2022)
