Nationwide Building Society completes purchase of Virgin Money

The Swindon-headquartered Nationwide Building Society has completed its controversial take-over of Virgin Money.

Nationwide believes that the acquisition will create a financially stronger building society with returns that will deliver greater value to its members, including savings and lending rates.

But Nationwide members did not get to vote on the takeover. The building society rejected demands for a member vote, claiming it was not legally necessary. The shareholders at Virgin, however, voted 89 per cent in favour.

The combination of both businesses will result in a mutually owned, full-service organisation. Together, the organisations will be the UK’s second largest provider of mortgages and savings accounts.

Virgin Chief Executive David Duffy has stepped down and has been replaced by Nationwide's chief finance officer Chris Rhodes. Virgin has more than six million customers, including those with savings and mortgages. 

Chris said: "We’re excited about our future as two purpose-driven businesses with a shared goal of supporting our customers, colleagues and communities. Virgin Money Stores are now included in Nationwide’s Branch Promise. This means that everywhere there is a Virgin Money Store, we promise to still be there until at least the start of 2028.

"For now, it's very much business as usual – there's no impact to Virgin Money (or Clydesdale and Yorkshire Bank) products and services. Customers who have savings with both Virgin Money and Nationwide will continue to benefit from the maximum protection offered by the Financial Services Compensation Scheme on each of their Virgin Money and Nationwide accounts."

Nationwide Chairman, Kevin Parry, added: "Importantly, Nationwide is still a mutual and owned by our members. All of the profits generated by Virgin Money will be retained for the benefit of customers and, for the first time in the UK, a full-service business bank will be part of a large mutual.

The country’s small and medium businesses will be able to choose to bank with a national brand that cares about the services and support it provides for customers and the impact it has on society without having to meet the needs of external shareholders."

The news of Nationwide's acquisition completion comes after the Coventry Building Society announced in April that it was to take over the Co-op bank.

Coventry Building Society in £780m merger talks with Co-operative Bank