Nationwide Building Society

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Nationwide Building Society
Type 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, Car insurance, Home insurance, Travel insurance, Credit cards
Net income £1.39 billion GBP (Interim Results for the period ended 30 September 2013)
Total assets £193.3 billion GBP (Interim Results for the period ended 30 September 2013)
Employees 15,000
Divisions Cheshire Building Society
Derbyshire Building Society
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 the merger between Nationwide and the Anglia Building Society in 1987 and between Nationwide and Portman in 2007 — it is now a top-three provider of household savings and mortgages in the UK.

Nationwide has assets of around £193.3 billion[1] compared to £325 billion for the entire building society sector,[2] making it larger than the remaining 44 British building societies combined.

It is a member of the Building Societies Association, the Council of Mortgage Lenders and Co-operatives UK.[3]

History[edit]

The Society's origins lie in the Provident Union Building Society established in Ramsbury, Wiltshire (1846), 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.[4]

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.[5]

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 the former Portman Building Society on 28 August 2007, creating a mutual body with assets of over £160 billion and around 13 million members.

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,[6] followed by the Dunfermline Building Society on 30 March 2009.[7] While the three building societies currently operate as divisions of the Nationwide under their own brands, it was announced in 2012 that they would start to be integrated into the Nationwide brand. Nationwide say that the integration will be phased and will be completed by mid 2015.[8] The Dunfermline Building Society was the first of the three regional building society brands to be integrated, with the rebranding completed in June 2014.[9]

On 24 March 2009 Nationwide opened a direct savings branch in Dublin, Ireland called Nationwide UK (Ireland).[10]

Mutual status[edit]

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.[11]

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.[12]

Controversies[edit]

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,[13] and with the CEO's compensation rising 45% to £2.25 million by 2012[14] the board's levels of pay attracted criticism in the Daily Mail's This is Money,[15] The Guardian,[16] and The Huffington Post.[17]

Products and services[edit]

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[edit]

In Nationwide’s most recent interim financial results (for the half year ended 30 September 2013), they reported a 155% increase in underlying profit to £332 million and a 25% increase in total underlying income to £1.39 billion. Their statutory profit was £270 million.

Gross mortgage lending increased by 37% to £14.0 billion and net lending rose 75% to £5.6 billion. Over 30,400 first time buyers were helped onto the housing ladder.[1]

Credit rating[edit]

Nationwide's long term credit rating, in February 2014, was A2 with Moody's, A with Standard & Poor's and A with Fitch Ratings.[18]

Subsidiaries[edit]

Nationwide also owns several subsidiary companies,[19] 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[edit]

  • Geoffrey Howe - 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)
Nationwide Building Society's head office in Swindon, Wiltshire.

See also[edit]

References[edit]

  1. ^ a b http://www.nationwide.co.uk/~/media/nationwide.co.uk/pdf/about_nationwide/halfyearlyaccounts2013.pdf
  2. ^ http://www.bsa.org.uk/keystats/index.htm
  3. ^ http://www.nationwide.co.uk/about_nationwide/membership_matters/history/history.htm
  4. ^ https://www.facebook.com/NationwideBuildingSociety/timeline/1970
  5. ^ http://web.archive.org/web/20070927004747/http://www.nationwide.co.uk/mediacentre/PressRelease_this.asp?ID=1001
  6. ^ "Nationwide rescues small lenders". BBC News. 8 September 2008. Retrieved 3 March 2013. 
  7. ^ "Nationwide takes over Dunfermline". BBC News. 30 March 2009. Retrieved 3 March 2013. 
  8. ^ http://your.nationwide.co.uk/your-news/articles/Pages/regional-brands-integration.aspx
  9. ^ "Dunfermline to be merged with Nationwide". BBC News. 24 October 2013. Retrieved 24 October 2013. 
  10. ^ "World’s largest Building Society opens for business in Ireland". Nationwide Building Society. 24 March 2009. Retrieved 3 March 2013. 
  11. ^ "Business: The Company File Conversion rejected". BBC News. 23 July 1998. Retrieved 3 March 2013. 
  12. ^ http://www.theguardian.com/money/2001/apr/21/personalfinancenews.jobsandmoney
  13. ^ Alan Debenham. "Building Societies Members' Association - Nationwide Building Society". Retrieved 29 June 2013. 
  14. ^ Patrick Collinson (22 June 2012). "Nationwide scales up on executive pay". The Guardian. Retrieved 29 June 2013. 
  15. ^ James Salmon (25 June 2013). "Nationwide faces day of reckoning as it grapples with £1bn black hole - and lavishes seven-figure sums on top brass". This Is Money. Retrieved 29 June 2013. 
  16. ^ Patrick Collinson (22 June 2012). "Nationwide scales up on executive pay". The Guardian. Retrieved 29 June 2013. 
  17. ^ Asa K Cusack (25 June 2013). "Nationwide Executive Pay Is a Disgrace to Mutualism: Fight Back at the AGM!". The Huffington Post. Retrieved 29 June 2013. 
  18. ^ Clare Francis (3 February 2014). "How safe is your bank?". moneysupermarket.com. Retrieved 5 June 2014. 
  19. ^ http://www.nationwide.co.uk/about_nationwide/membership_matters/subsidiaries.htm

External links[edit]