Nationwide & Portman to Merge!!!

foreversummer

Hi

Is the £200 bonus per member, or per account?

I've got two savings accounts with the Portman - one is an ISA with about £1500 in the other is an old savings account with £137 in it.

Foreversummer

Mr_Mumble

ReportInvestor wrote:

Please get your facts right about the relative sizes before passing judgement.

My facts were right... pre-staffordshire takeover, sorry. Still 6-7 times the size range now and the reason Nationwide members don't get a vote is because Nationwide is substantially bigger. The economies of scale thing:

Cazenove's analyst Simon Pilkington warned it was "uncertain" as to whether the deal would create a more effective competitor in the financial services market. "At the margin, a larger mutual brings additional competitive pressure to UK retail banking, but Portman does not transform the size of Nationwide,"

url

Cazenove advised Portman in the merger talks.

So its hardly just Mr Mumble on a message board having doubts about this.

ReportInvestor wrote:

Do they actually pay people at IFAOnline to write such utter garbage?

The crux of the argument in the article seems to be the Portman gives Nationwide more access to the sub-prime and self-certification mortgage markets. Reuters say something pretty similar.

Portman will boost Nationwide's wealth management and financial planning services and widen its range of specialised mortgage lending, including buy-to-let and non-prime loans.

Reuters also mention that Nationwide are paying 20x earnings for Portman while Barclays only paid 15x earnings for Woolwich. Why are Portman worth the premium?

Speculator

Hi

Is the £200 bonus per member, or per account?

I've got two savings accounts with the Portman - one is an ISA with about £1500 in the other is an old savings account with £137 in it.

Foreversummer

£200 min per person plus a percentage of your combined account balances. Details will be announce probably sometime next year.

However, based on previous mergers, you will probably only qualify for the minimum payout of £200 pre tax or £160 if you are a basic rate tax payer.

cheggers

£160 windfall after tax:mad: :mad: :mad:

Not the best return from £100 but still better than nothing.

Now need to bag some more societies that are ripe for a merger, I've heard Edinburgh Building Society might be worth a punt. Anyone elese got any feelings on where to bag next???

Robert_Sterling

Bag all sixty of them!

schiff

ED wrote:

Mike Trippitt, analyst at Oriel Securities, re Portman merging with Nationwide, "Does this really queer the pitch for people like Northern Rock and HBOS?" - hmm, "queer the pitch"? - methinks someone misheard "clear the pitch"!

'Queer the pitch' is an expression that's been in my vocab during a long life. I've always understood it to imply 'make a mess of the status quo', 'present big problems when there were few before', 'interfere with someone doing what they were intent on doing or likely to do' etc.

To understand what Mr Trippitt actually meant would involve, I think, knowing what NR and HBOS were 'up to' or likely to get up to in the future. I don't know what he was implying - maybe you do! Perhaps you need to be something of an insider to really know.

Taking the time out to do this post has really queered my pitch for going out tonight - I've missed my blasted train!

schiff

ReportInvestor

Mr_Mumble wrote:

My facts were right... pre-staffordshire takeover, sorry.

i.e. pre-2003 and also pre-Lambeth takeover and pre-Portman expansion 2003/4/5/6 (Portman are the fastest expanding society of the last decade).

And your point about the Nationwide's greater size rather negates the analyst's point about it taking on greater risk via Portman's non-society business (which is much smaller than Portman's ordinary business).

I don't object to the argument about BSs taking on risk. It was made on the Investors' Association many moons ago.

See here

But the scale of the extra risk Nationwide is taking on is small in comparison to the size of the new society, and there are plenty of Portman directors going onto the Nationwide board to help them manage it. An example was the Portman's lead to the rest of the market in withdrawingl from new build buy-to-let a few months ago.

Much greater risk, proportionately, is run by Britannia & Skipton BSs.

Mr_Mumble wrote:

Nationwide are paying 20x earnings for Portman while Barclays only paid 15x earnings for Woolwich. Why are Portman worth the premium?

1) Because of the geographical location I alluded to earlier. If you were setting up a BS in the 1990s in the UK (assuming none existed) you would have been sensible to have gone for the South / South West of England (where the Portman reigned supreme) rather than the North or Midlands (where paradoxically, for historical reasons, there are scores of BSs).
2) Because the Woolwich was already a bank and had been several years into the business of maximising profits, unlike the Portman which is still a building society.

Those analysts quoted on the Reuters link simply haven't grasped that this deal means that Nationwide current accounts will hit the SW of England big time. They're just scratching around for something to say to a journalist & comparing BS & Plc earnings is an easy number crunching option but not very useful to anyone.

Bottom line is that analysts are not paid to analyse building societies. The only analyst I would trust is Rob Thomas, formerly of UBS, who used to analyse the sector before it contracted. But I think he moved to the Council of Mortgage Lenders and may even have moved onto HBoS (but I'm not sure of this - just that there is a Rob Thomas working for them).

steady__eddie

Robert_Sterling wrote:

Bag all sixty of them!

A nice idea but as I understand it reading the T + C s, the following Societies impose limitations to membership on potential applicants living geographically outside of their "catchment" area :-

Barnsley
Cambridge
Cumberland
Darlington
Marsden
Newbury
Penrith
Progressive
Vernon

Nationwide, Buckingham & Norwich & Peterboro, I believe have a total signaway clause for new members. I compiled the above info. last year when I was in carpetbagging mode so it may now be incomplete. i.e. Ipwitch now grant "foreigners" membership.

ReportInvestor

Thanks for the useful info, s_e, but the Nationwide/Portman topic is probably big enough on its own for this thread. In fact, isn't there another thread going on at the moment for this carpetbagging thing, if anyone can spare the time and put up with the dreary form filling?

ReportInvestor

Speculator wrote:

£200 min per person plus a percentage of your combined account balances.

More or less.

In fact you will get a percentage of your combined balances, but subject to a minimum £200 per person.

e.g. if the rate applied is 4%, you would need £5K+ with the Portman to qualify for more than £200.

Given that Portman has traditionally been the society of the small saver, I would not be surprised if the majority of Portman savers to get no more than £200.