Nationwide swoops on battered rivals

KTF

This has now appeared on the Nationwide Media Centre:

Date issued: 7 Sep 2008
STATEMENT FROM NATIONWIDE BUILDING SOCIETY
Further to coverage in today’s media, the Board of Nationwide Building Society can confirm that it is in advanced discussions with The Derbyshire and The Cheshire Building Societies over the terms of independent and proposed mergers.
Further announcements will be made once those discussions have concluded.

From: http://www.nationwide.co.uk/mediacentre/PressRelease_this.asp?ID=1260

I,_Brian

So far as I understand it, the government can't afford to nationalise any more lenders, so Nationwide - which appears to have a pretty strong balance sheet relative to the sector - has been coerced into taking the smaller 2 building societies rather than see them fail.

Reports in general suggest no windfalls for anyone - this isn't a case of a proper buy-out, as much it's a commercial rescue backed by the government rather than by market forces so far as I understand it.

bristolleedsfan

I,_Brian wrote: »

as much it's a commercial rescue backed by the government rather than by market forces so far as I understand it.

Indication here that it wont be a rebranding ( Nationwide will wait till the risk of legal challenges have subsided then do the rebranding and branch closures IMO)


Times Online
September 7, 2008

Nationwide Building Society set to merge with the Derbyshire and the Cheshire

Nationwide, Britain's biggest building society, is close to buying its rivals at both the Derbyshire and the Cheshire.

News of the talks comes a year after Nationwide merged with the Portman Building Society, triggering windfalls of up to £1,000 for members of the Bournemouth-based organisation.

In a statement today, Nationwide said the discussions with the Derbyshire and Cheshire societies were advanced. Although there is no guarantee the deals will go ahead, the building society is thought to be confident of the outcome.

The Derbyshire has 50 branches and 500,000 members, and the Cheshire, which is based in Macclesfield, has 45 branches as well as 13 estate agency outlets.

It is thought that Swindon-based Nationwide will retain the building societies' names and branch networds, rather than rebranding them or closing any offices. Nationwide has 900 branches and 14 million members.

Graham Picken, chief executive of the Derbyshire, is thought to have initiated the talks with Nationwide in the summer after deciding that, in the face of deteriorating credit markets, his members' cash would be safer with the support of a larger organisation. Many small building societies have struggled to obtain wholesale funding to cover the cost of doing business after the interbank lending market closed in the credit crunch.

Nationwide has benefitted from Northern Rock's collapse and funding problems at other banks, which prompted savers to move their cash to more stable institutions. The building society opened 1.5 million new savings accounts in the financial year to April, with almost £1 in every £5 saved in the UK going into Nationwide's coffers.

But the building society's share of the mortgage market shrank from 11 per cent to 7.1 per cent as it focused on quality lending.

Milarky

(The FSA seems has found an ingenious third way in building society re-organisation - not a buyout - not a merger - but an 'advanced discussion')

Hmm! I'd like to 'rescue' my local council (from the effects of the credit crunch) using an 'advanced discussion' this year about our council tax.... ...did they know that I, and all the taxpayers, 'stand behind' them - so why do they need us to actually 'pay' anything in the here and now

[This, my friends, is a Tony Harrison Moment....]

More seriously, are we talking about a deferred takeover (a 'merger' in FSA parlance) and a vote, at least, by Cheshire and Deryshire members in (say) a year's time - with or without payout?

fatpig_2

It's a rescue, not a takeover or a merger. And there'll be no windfall for anyone.

Milarky

fatpig wrote: »

It's a rescue, not a takeover or a merger. And there'll be no windfall for anyone.

Any Nationwide money on the table in that case? Should Nationwide members (who own it) be consulted about that? And there's still the minor question of 'ownership' - who's holding the charge over Derbyshire and Cheshire mortgages as of tomorrow morning?

bristolleedsfan

http://findarticles.com/p/articles/mi_qn4158/is_20060331/ai_n16200420

MarkyMarkD

I can't believe what the Times says will be true. Nationwide hasn't kept the identity of anything else it's acquired over the years, and some of them have been more significant than these two.

I wouldn't bet a single penny on the Cheshire and Derbyshire Building Society names being anything other than a fond memory in a year's time.

Cozworth806

MarkyMarkD wrote: »

I can't believe what the Times says will be true. Nationwide hasn't kept the identity of anything else it's acquired over the years, and some of them have been more significant than these two.

I wouldn't bet a single penny on the Cheshire and Derbyshire Building Society names being anything other than a fond memory in a year's time.

Sad but true, if the Nationwide were handling the mergers and their own customer service and administration better then I would be all for this but frankly they should get their own house in order and as I said earlier I would prefer a conglomerate of smaller societies rather than this nil paid take over.

I knew the Derbyshire was said to be possibly in trouble but I feel this still is not in the best interest of members, and I would like to know who else was sounded out about it. I can't believe that either Yorkshire or Skipton wouldn't have been interested.

mikbruin

Well it is looking as if this is a rescue, and the word "merger" is rubbish.

I cannot believe that at the very least there wouldn't be some token payment.

Both cheshire and derbyshire have assets of billions. There needs to be a reality check here, all thats hapened is that houses have fallen 10% (incontext of massive rises over last decade), they probably have a few dozen repossesions to deal with, and a few hundred defaulters (with varying levels of equity). Can't be 'that' bad, can it?

I have accounts with both these and the catholic. Awaiting letter anyday re catholic payout.