Nationwide & Portman to Merge!!!

Mr_Mumble

Wow, so this is how Nationwide are spending the hundreds of millions they've made off their own savings members recently - give it to other people. Proud to be Different!

ReportInvestor

But think of the future economies of scale Mr. M.

And another potential bonus for Portman members should be that all children ought to be eligible for a windfall since Portman's policy is to make children the first named member on the account.

£200 extra pocket money should ensure a few loyal Nationwide customers for life.

MattyNeth

I read that it will be at least £200 for any windfall. I opened up a savings account with the Portman about 10 years ago, and currently hold £101!

Do you think they may decide the windfall on the balance or your "length of service". if on balance is it worth adding to my current balance or will the cutoff be the balance held at the close of business last night (11th Sept)?

Milarky

ReportInvestor wrote:

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

Can you elaborate? Is there a regulatory rule or something like that you are aware of? If it had been four-and-a-bit times would that have meant a voted was required?

It stinks for long standing NW members however who get nothing from this - and not even a say - but then it seems their 'membership' can be taken for granted. NW could/can afford to give £200 to its own members as a 'goodwill' payment as a downpayment on any windfalls which may be triggered at a later date. It parrots that mantra about 'extra benefits since 1996' and this just takes the biscuit.

Unless NW pays something to its own members (eg £200) then joining Portman members will receive an added benefit at the expense of the current NW membership - that is because they will be joining a club holding more of its own money than otherwise - which they can then share (in any later windfalls).

Robert_Sterling

Deleted_User wrote:

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?

The Nationwide members own the Nationwide.
They do not run the business.
The Directors run the business.

It is a bit similar to the voters electing the government and the government then running the country.

KTF

I used to have a Portman account for many years but closed it about a year ago since he rates were no longer competative. Had I known...

At least it I can walk to my local Nationwide now (once the Portman in the village that I live in gets rebranded).

Milarky

Robert_Sterling wrote:

The Nationwide members own the Nationwide.
They do not run the business.
The Directors run the business.

It is a bit similar to the voters electing the government and the government then running the country.

Yes, and I've just come off the phone from NW's press officer who has explained that to me. Nationwide was 'not required' to consult its own membership over this - Portman is about 15% the size of NW and is distributing 70% of its own reserves. The FSA hushed it through as 'normal' business practice. Hey, it happens all the time!

Except. They knew they wanted to do this a while ago at the Board of NW. And (following your analogy) they held elections to the Board just two months ago. In other words the timing suits the 'government' nicely, doesn't it? If there was (by coincidence) an election of Directors next month you bet this question of merger without a vote or compo would come up then. It wouldn't happen like that, of course because our elected 'government' at Nationwide holds all the cards.

'MUTUAL' means less and less and is becoming just a brand - that's all. Mutual 'members' are never given meaningful influence - its just a term. Nice warm rosy feeling.

pauliney_2

what a load of rubbish been with them years not had so much as a penny everyone should get a windfall yes I know it don,t work that way humbug

ReportInvestor

Milarky wrote:

Can you elaborate? Is there a regulatory rule or something like that you are aware of? If it had been four-and-a-bit times would that have meant a voted was required?

It stinks for long standing NW members however who get nothing from this - and not even a say - but then it seems their 'membership' can be taken for granted. NW could/can afford to give £200 to its own members as a 'goodwill' payment as a downpayment on any windfalls which may be triggered at a later date.

See Section 3:2 of this document for confirmation of the 5:1 ratio FSA rule that allows the Nationwide directors to act without a ballot of their members, but as correctly outlined by Robert Sterling a few posts above.

FSA ruling on the Portman / Lambeth merger 2006

The windfall for Portman members is paid for from the Portman reserves, and that requires the consent of the Portman members - hardly likely if 6x the number of Nationwide members were allowed to join in the bunfight for their dosh.

Under the Basel II arrangements, it is said that many building societies are heavily capitalised.

So if people generally wanted to petition the Nationwide to make a paymemt to members out of the Nationwide reserves, then they should start a campaign with the July 2007 Nationwide AGM in mind. [Resolutions with 500 qualified supporting signatures or directors' nominations would have to be lodged with the Society by the start of April 2007.]

It's your society.

Milarky

Thanks

But the reality is that - with it's reserves 70 percent depleted - Portman is actually giving Nationwide member's money to its members in exchange for their approval (since by implication those 'reserves' are rebuilt where it enters into a larger undertaking and all members are then members of the Nationwide)?

Now suppose that Nationwide's Board Proposed to allow Portman to keep it's reserves and handed over £200 per new member instead? That at least would be straightfoward expropriation of Nationiwide Members' cash and it would call into question their freedom to do so without consulting the Members first.

The 5 to 1 ratio is there in FSA guidelines (how convenient) no doubt drawn up when at least some Building societys were less than five times the size of others. But it suits Nationwide like a glove. Why not 10 to 1? Indeed why have any ratio at all, as it simply encourages scaled takeovers like this one touted as 'mergers'?

Thanks again for the advice on how this could be challenged. I might just take that up. (But as I say it's the old 'ball in your court' problem that the initiative rests with the Board - an unequal battle)