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
David Roberts, Chairman
Joe Garner, Chief Executive
Products Retail banking, Savings
Mortgage loans, Investments, Insurance, Current accounts, Loans, Home insurance, Travel insurance, Credit cards
Number of employees
Around 17,000
Slogan "On Your Side"
Website www.nationwide.co.uk
Former Logo - Nationwide Anglia

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 7.1% market share of current accounts and was ranked number one for customer service satisfaction amongst its high street peer group for the 3 months ending 31 March 2016.[1]

For the financial year 2015/2016, Nationwide had assets of around £208.9 billion [2] compared to £331 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] In 2016 Nationwide appeared 3rd in The Sunday Times 'Top 25 Big Companies To Work For' poll,[5] up from 6th in 2015. Nationwide also came 2nd in the British Bank Awards 2016.[6]

History[edit]

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.[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 1992.

Nationwide launched the UK's first internet banking service on 27 May 1997.[8]

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,[9] followed by the Dunfermline Building Society on 30 March 2009.[10]

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.[11]

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.[12][13] 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.[14] Joe Garner joined the Society as Chief Executive on 5 April 2016.

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.[15]

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.[16]

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,[17] and with the CEO's compensation rising 45% to £2.25 million by 2012[18] the board's levels of pay attracted criticism on This is Money,[19] and in The Guardian,[20] and The Huffington Post.[21]

Products and services[edit]

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[edit]

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%.[22] 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.[23]

Credit rating[edit]

Nationwide's long term credit rating, as of February 2016, was A1 with Moody's, A with Standard & Poor's and A with Fitch Ratings.[24]

Subsidiaries[edit]

Nationwide also owns several subsidiary companies,[25] 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]

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

See also[edit]

References[edit]

  1. ^ "Preliminary Results for the year ended 4 April 2016" (PDF). 
  2. ^ "Preliminary Results for the year ended 4 April 2016" (PDF). 
  3. ^ "Key Stats". Building Societies Association. 
  4. ^ "Our History". Nationwide Building Society. Retrieved 16 November 2015. 
  5. ^ Dominic O'Connell (26 February 2016). "The Sunday Times 100 Best Companies". The Sunday Times. Retrieved 5 March 2016. 
  6. ^ "British Bank Awards 2016". Money Market UK. Retrieved 13 May 2016. 
  7. ^ "Nationwide Building Society Timeline 1970". Facebook. Retrieved 16 November 2015. [dead link]
  8. ^ "Nationwide Celebrates Ten Years of Internet Banking". Nationwide Building Society. 22 May 2007. Retrieved 16 November 2015. [dead link]
  9. ^ "Nationwide rescues small lenders". BBC News. 8 September 2008. Retrieved 3 March 2013. 
  10. ^ "Nationwide takes over Dunfermline". BBC News. 30 March 2009. Retrieved 3 March 2013. 
  11. ^ "World's largest Building Society opens for business in Ireland". Nationwide Building Society. 24 March 2009. Archived from the original on April 28, 2009. Retrieved 3 March 2013. 
  12. ^ Nationwide Building Society (20 March 2014). "Regional Brands integration". Nationwide Building Society. Retrieved 16 November 2015. 
  13. ^ "Dunfermline to be merged with Nationwide". BBC News. 24 October 2013. Retrieved 24 October 2013. 
  14. ^ http://www.nationwide.co.uk/about/media-centre-and-specialist-areas/media-centre/press-releases/archive/2015/11/16-nationwide-building-society-appoints-joe-garner-as-chief-executive "Nationwide Building Society appoints Joe Garner as Chief Executive", 16 November 2015
  15. ^ "Business: The Company File Conversion rejected". BBC News. 23 July 1998. Retrieved 3 March 2013. 
  16. ^ Rupert Jones (21 April 2001). "Blow for carpetbaggers". The Guardian. Retrieved 16 November 2015. 
  17. ^ Alan Debenham. "Building Societies Members' Association - Nationwide Building Society". Retrieved 29 June 2013. 
  18. ^ Patrick Collinson (22 June 2012). "Nationwide scales up on executive pay". The Guardian. Retrieved 29 June 2013. 
  19. ^ 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. 
  20. ^ Patrick Collinson (22 June 2012). "Nationwide scales up on executive pay". The Guardian. Retrieved 29 June 2013. 
  21. ^ 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. 
  22. ^ "Preliminary Results for the year ended 4 April 2016" (PDF). 
  23. ^ "Nationwide Building Society Full Year Results: Long term focus drives strong performance". 
  24. ^ http://www.nationwide.co.uk/about/investor-relations/introduction
  25. ^ "All About Nationwide Membership". Nationwide Building Society. Retrieved 16 November 2015. 

External links[edit]