Nationwide ever becoming a bank?

sauvignon

Many years ago some building societies were changing into banks compensating their customers. Is there any chance that Nationwide may yet become a bank one day? Or is this completely ruled out?

As a long-time customer I feel they're behaving more and more like a bank, but don't have a major reason to switch providers - as yet.

bravotango

Not heard anything about whether they would be converting to a bank, and doubt they would be doing so in the near future.

I can only assume Nationwide have probably sussed people are holding their accounts for a pay out, and so the idea of converting to a bank, and paying out to its customers is probably one of the main reasons it has never done it.

Would probably anticipate maybe in the long term future to be honest.

If they did decide to convert to a Bank, I'd reckon they would probably put limitations on who would be compensated (e.g. min. account balance, length of account held, etc, etc).

callum9999

bravotango wrote: »

Not heard anything about whether they would be converting to a bank, and doubt they would be doing so in the near future.

I can only assume Nationwide have probably sussed people are holding their accounts for a pay out, and so the idea of converting to a bank, and paying out to its customers is probably one of the main reasons it has never done it.

Would probably anticipate maybe in the long term future to be honest.

If they did decide to convert to a Bank, I'd reckon they would probably put limitations on who would be compensated (e.g. min. account balance, length of account held, etc, etc).

Why would they care that people are holding out for a pay out? If they're going to convert to a bank and therefore make a windfall payout then they'd be paying out the same amount regardless of the motivations of account holders.

I may be wrong, but the main reason to convert to a bank seems to be to make it easier to raise capital. Nationwide doesn't appear to have a major issue with that at the moment so I also don't see anything that would make them convert in the near future.

System

You will have to more than a customer to benefit - you'd have to be a member of the BS (which you might be) and have £100 on deposit / borrowed.

Nationwide used to be very competitive on their product range but I consider their FlexDirect account to be the antithesis of what a mutual organisation is all about.

To answer your question, not soon enough for me and I wouldn't even notice other than some free shares or cash.

sauvignon wrote: »

As a long-time customer I feel they're behaving more and more like a bank, but don't have a major reason to switch providers - as yet.

sauvignon

Thanks for all your replies confirming what I was thinking anyway.

I agree with Heng Leng that to me, too, as a mutual they don't stand out as particularly customer friendly or competitive anymore. I must admit my own loyalty has faded over the years and one by one I have moved my saving and credit card accounts to other providers with only my current account remaining.

But we are creatures of habit and I quite like their online banking interface, albeit mainly because the only other I'm familiar with is Barclays' which I find useless. I should qualify for a payout - there was a cut off point for new customers some time in the past and no other conditions were mentioned at that time - so having no pressing reason to change, I'll probably bide my time.

PeacefulWaters

The main reason to demutualise was to raise additional funds to lend, beyond the savings balance held by the organisation.

Halifax (lost 98% of its peak value)
Northern Rock (went bust)
Alliance and Leicester (lost 80% of its peak value)
Bradford and Bingley (went bust)

Now, looking at that list, why on earth would nationwide wish to demutualise?

dreaming

As an ex-Nationwide employee I would say that they became "more like a bank" several years ago. I have no beef with them, by the way, I worked there for many years until retirement and am very pleased with my pension now. But...sitting in management cascades and hearing how they were trying to put off the customers who just wanted to take out £20 from their pension (by directing them to the cash machines); hearing how customer facing staff (not just in branches but the call centre too) had "targets" for cross selling which affected their yearly appraisal, and thus any pay increase; and hearing the Chief Exec. calling Nationwide a "mutual bank" made me realise that the days of the cosy, local mutual were long gone. Again, no problems with that - it's the way of the world to grow in business - but really they are far too big now to really be a mutual. There are some excellent things about them as well though - they weathered the recession better than many banks did for example, but after 60+ years of being a customer (admittedly early on with the local BS which was taken over by Anglia, then through various identities until Nationwide) I no longer have any accounts there, and my mortgage was paid off when I retired. I do agree their online banking is very good but the interest rates at certain banks more than compensate for that.

sauvignon

Dreaming, you actually preempted my post below while I was writing, but here it is anyway.

I accept PeacefulWaters' point, although my original question was formulated from a customer's perspective, not the BS's.

Still, why has it been allowed to grow so large and powerful? It's said to be larger than the rest of the UK mutual societies combined. This may be why it increasingly feels like a bank, not like being "on your side". Aren't there limits to a mutual society's size and the levels of remuneration of its management?

I personally don't understand why its customer ratings are still so high. It has been significantly outstripped by FirstDirect on current accounts, but that's probably not where N makes its money, so it may not mind much.

sauvignon

BTW according to Wikipedia, it's the largest building society in the world...
Speaks for itself, doesn't it.

bigadaj

You've got to be big to survive, many smaller building societies are still struggling and the years of zero interest rates and funny money have made life difficult.

Many things in banking are personal preference I use nationwide as my mainest account, tried first direct a few years ago and didn't get in with it at all.

Fd still seems to be popular and get good reviews but far more complaints now and the competition has sharpened. I think being part of hsbc doesn't help them at all either.

There's no real justice in demutualising for a bonus for current members, the brand has been built up over generations and many decades, and as peaceful waters has pointed out the results have often been terrible.

Sam_Fallow

Wasn't it the case that shortly after all the carpetbagging frenzy the Nationwide drew a line and said that all new accounts wouldn't be eligible for any payout if they ever did demutualise?

Have I remembered this wrong or did they change the policy?