Nationwide & Portman to Merge!!!

Speculator

Nationwide and Portman to merge

The Nationwide and Portman building societies have announced that they are to merge, creating a mutual body with assets of more than £150bn.

http://news.bbc.co.uk/1/hi/business/5337310.stm

Speculator

My guess is only Portman Members will get merger windfalls.

[Deleted User]

Speculator, you are right only the Portman members will get a windfall. The Nationwide members don't even get a vote on the merger. What happened to the Nationwide being owned by its members and as a result getting to vote on things like this?

bilbo_2

More info from Nationwide:
http://www.nationwide.co.uk/mediacentre/PressRelease_this.asp?ID=889

Qualifying saving and qualifying borrowing members of Portman are expected to receive a minimum merger bonus of £200 (pre-tax) (see notes to editors for further details), representing a distribution of over 70% of Portman’s general reserves at 30 June 2006.

Notes to editors:
Eligible savers and eligible borrowers of Portman will receive further details of the proposed merger in advance of Portman's 2007 AGM, together with details of the merger bonus arrangements. Bonus payments to qualifying savers will be based on the lower of account balances at the close of business on 11 September 2006 and a future date which will be specified in the merger booklet. A minimum savings balance as at the close of business on 11 September 2006 of £100 will be one of the requirements, as will continuous shareholding membership between the two dates. Details of the merger bonus for qualifying Portman borrowers will be specified in the merger booklet. A minimum mortgage balance as at the close of business on 11 September 2006 of £100 will be one of the requirements. Payment of the merger bonus is dependent upon approval of the merger by Portman members, confirmation by the FSA and the required regulatory approvals.

alanobrien

Now i get it, we were getting bad savings rates with natiowide to pay for the merger......very mutual. I wonder if the boss will be giving himself a pay rise

CopperPlate_2

Surely not! :rotfl:

It's a 'merger' but as you can see the majority of Portman branches are being re-branded as NW - it's a takeover in all but name - headquartered in Swindon (NW), CE to be from NW, branches rebranded as NW... Wonder if this mega-economy of scale is going to benefit members.

I think some of the smaller banks had better watch out...second largest mortgage in the country...and enough financial firepower to perhaps make Northern Rock or Bradford & Bingley think about their future. Ironic if they were swallowed up by a mutual wouldn't it.

edda

This is not a good move for savers or investors.

The largest and 3rd largest building societies will occupy an even larger influence on the market, leading to less choice and more 'follow my leader' tactics.

Portman subsumed the Staffordshire Building Society a while ago, and both have a history of rates towards the lower end of the scale. The Portman particularly, used short term headline rates to get into best buy charts and then reduced them once they had enough people (relying on lethargy to retain a number).

It appears that the Nationwide has been practising this recently and found it successful - as far as their management are concerned.

I shall be giving notice on all relevant Nationwide accounts immediately.

Speculator

Non-Taxpayers who only hold an ISA with the Portman would probably have to submit a form R85 to get their merger bonus tax-free.

Thefunkygibbons

I have been holding a NW account for years for the old carpet baggers return

I know have enough savings elsewhere, so I am closing the account and using the money elsewhere for a better return

Speculator

Just read the leaflet. It looks like Lambeth members will also get a bonus in respect of this merger.

http://www.portman.co.uk/questions.pdf

ReportInvestor

edda wrote:

This is not a good move for savers or investors.

The largest and 3rd largest building societies will occupy an even larger influence on the market, leading to less choice and more 'follow my leader' tactics.

I shall be giving notice on all relevant Nationwide accounts immediately.

I don't follow your reasoning edda.

With this addition, Nationwide will be in a stronger position to exert market pressure on the Plc banks. Isn't that a good thing?

I suppose my preference would have been for a Portman/Britannia/Yorkshire merger to create a second major mutual player to rival Nationwide. But that would have meant no windfall for Portman members and both Britannia & Yorkshire CEO's are too young and ambitious for their own independent organisations.

BTW, because Nationwide is just over 5 times the size of Portman, Nationwide members will not vote on this deal.

As a long standing Portman member I shall be voting in favour. It will be nice to see the end of the Portman's ridiculous transfer out charge on their ISAs, not to mention getting a free £200 gross, £160 net .