Nationwide take over of Virgin Money

[Deleted User]

RG2015 said:

[Deleted User] said:

Hoenir said:

[Deleted User] said:

boingy said:

The buy out will make Nationwide "the UK's second largest mortgage and savings group". Nothing to do with benefitting members or customers. It's just a quick way to grow.

As a Building Society, it's main raison d'être is to benefit it's members (owners) and simply becoming the UK's second largest mortgage and savings group doesn't necessarily do that...

Remaining a UK mutually owned lender. Is far better than being taken over by a US "maximum profit / send the profits abroad to shareholders" bank.  

Mutually owned is just an ownership model - it doesn't mean that an organisation is run better or worse than a standard PLC. I would contend that Nationwide is worse as all it's products are now mediocre (definitely not any better than it's PLC brethren) yet unlike them it's not produced a dividend to it's owners unless you count the haphazard £100 payments last year.

Most banks go though a spell with better products and then return to mediocrity. Nationwide is no different. I currently have an 8% regular saver (now 6.5%). HSBC, TSB, Barclays and Halifax currently have nothing much  to write home about.

The Nationwide supermarket cashback a year ago was pretty decent, and many started out with the Flexdirect current account with 5% interest on up to £1,000.

Are you seriously suggesting that either 'flash in the pan' offer demonstrates benefits of mutuality?!

Take the latter: FlexDirect is a classic retail banking loss leader -  after requiring you depositing 1K per month, you have a potential £4.16 monthly credit interest for that first year. This normalises to a potential benefit of 83p monthly credit interest - for which you give up Nationwide branch access, can't use your local Post Office to make deposits, pay circa 40% for borrowing and pay 2.99% overseas usage. Fandabidozi!

RG2015

[Deleted User] said:

RG2015 said:

[Deleted User] said:

Hoenir said:

[Deleted User] said:

boingy said:

The buy out will make Nationwide "the UK's second largest mortgage and savings group". Nothing to do with benefitting members or customers. It's just a quick way to grow.

As a Building Society, it's main raison d'être is to benefit it's members (owners) and simply becoming the UK's second largest mortgage and savings group doesn't necessarily do that...

Remaining a UK mutually owned lender. Is far better than being taken over by a US "maximum profit / send the profits abroad to shareholders" bank.  

Mutually owned is just an ownership model - it doesn't mean that an organisation is run better or worse than a standard PLC. I would contend that Nationwide is worse as all it's products are now mediocre (definitely not any better than it's PLC brethren) yet unlike them it's not produced a dividend to it's owners unless you count the haphazard £100 payments last year.

Most banks go though a spell with better products and then return to mediocrity. Nationwide is no different. I currently have an 8% regular saver (now 6.5%). HSBC, TSB, Barclays and Halifax currently have nothing much  to write home about.

The Nationwide supermarket cashback a year ago was pretty decent, and many started out with the Flexdirect current account with 5% interest on up to £1,000.

Are you seriously suggesting that either 'flash in the pan' offer demonstrates benefits of mutuality?!

Take the latter: FlexDirect is a classic retail banking loss leader -  after requiring you depositing 1K per month, you have a potential £4.16 monthly credit interest for that first year. This normalises to a potential benefit of 83p monthly credit interest - for which you give up Nationwide branch access, can't use your local Post Office to make deposits, pay circa 40% for borrowing and pay 2.99% overseas usage. Fandabidozi!

I am just stating facts. I don’t have an agenda. It was not my intention to infer any benefits of mutuality.

I was just challenging your contention that “Nationwide is worse as all it’s products are now mediocre” Just like most of the banks most of the time.

WillPS

As with any thread about Nationwide, the diehard carpetbaggers are determined to make the case that Nationwide somehow doesn't do enough for members. The "obvious solution" will never happen but they'll continue wasting their time pretending it might.

RG2015

WillPS said:

As with any thread about Nationwide, the diehard carpetbaggers are determined to make the case that Nationwide somehow doesn't do enough for members. The "obvious solution" will never happen but they'll continue wasting their time pretending it might.

Never mind Nationwide, what about the NatWest Group? We spent many millions bailing them out and what do we get back?

....Oh hang on; £600 from them for switching to their three main brands. They are even overlooking that most have already had loads from them in recent previous switches.

  

steven141

RG2015 said:

WillPS said:

As with any thread about Nationwide, the diehard carpetbaggers are determined to make the case that Nationwide somehow doesn't do enough for members. The "obvious solution" will never happen but they'll continue wasting their time pretending it might.

Never mind Nationwide, what about the NatWest Group? We spent many millions bailing them out and what do we get back?

....Oh hang on; £600 from them for switching to their three main brands. They are even overlooking that most have already had loads from them in recent previous switches.

  

It’s good for their stats to show so many new customers and also a lot of the people switching will stay or take out other products. 

DS_MSE

Whilst I am coming to this ‘Party’ late the primary thing that I find astonishing is how this proposed £2.9 BN acquisition of Virgin Money by Nationwide was first officially announced to members by email on / around 11th March where they informed Members that they were - ‘Considering making an offer to acquire Virgin Money’

and then only 12 Days later on / around 23rd March they inform Members, again by email that that -

‘Nationwide’s Board has carefully, and fully, considered this proposal. We have taken the comments received from members into account and examined thoroughly the information provided by Virgin Money’

Honestly …12 Days … who do they think they are trying to Kid and exactly what are the real tangible benefits of this acquisition for the average Nationwide Member. I also don't remember seeing any link or published means to enable Members to quickly and easily submit their views on this proposal, so I wonder how many 'comments received from members' were actually taken into account !

Once again it appears that the Board and Executive Team are using the benefits of Mutual status to do exactly what they want, without any oversight, according to their own agenda and schedule, without genuinely consulting and seeking the agreement of its existing Members unlike a PLC who would need the majority of it’s Shareholders to accept and pass such a significant business decision.

Whilst the ‘Carpetbaggers’ amongst us will no doubt be hoping that this may lead to further ‘Windfalls’ and ‘handouts’ of a few hundred pounds, I suspect that the Board and Executive Team will all be personally motivated and focused on the thought of massive Bonuses and Salary increases that will no doubt be awarded if they pull this off before moving on when it all goes horribly wrong !

 

26left

Petition created to ask for a member vote on change org. search for

Give Nationwide Members a Say on the purchase of Virgin Money

As I can’t post links yet - and the original thread on here appears to have been taken down…

WillPS

DS_MSE said:

Whilst I am coming to this ‘Party’ late the primary thing that I find astonishing is how this proposed £2.9 BN acquisition of Virgin Money by Nationwide was first officially announced to members by email on / around 11th March where they informed Members that they were - ‘Considering making an offer to acquire Virgin Money’

and then only 12 Days later on / around 23rd March they inform Members, again by email that that -

‘Nationwide’s Board has carefully, and fully, considered this proposal. We have taken the comments received from members into account and examined thoroughly the information provided by Virgin Money’

Honestly …12 Days … who do they think they are trying to Kid and exactly what are the real tangible benefits of this acquisition for the average Nationwide Member. I also don't remember seeing any link or published means to enable Members to quickly and easily submit their views on this proposal, so I wonder how many 'comments received from members' were actually taken into account !

What's your evidence that no "consideration" had already taken place at the point they announced their intention? Feels like this is a bad assumption to me.

DS_MSE said:

Once again it appears that the Board and Executive Team are using the benefits of Mutual status to do exactly what they want, without any oversight, according to their own agenda and schedule, without genuinely consulting and seeking the agreement of its existing Members unlike a PLC who would need the majority of it’s Shareholders to accept and pass such a significant business decision.

Whilst the ‘Carpetbaggers’ amongst us will no doubt be hoping that this may lead to further ‘Windfalls’ and ‘handouts’ of a few hundred pounds, I suspect that the Board and Executive Team will all be personally motivated and focused on the thought of massive Bonuses and Salary increases that will no doubt be awarded if they pull this off before moving on when it all goes horribly wrong !

 

Nils Pratley did a good piece in The Guardian where he opined that putting the takeover to a vote of members wouldn't be possible because of takeover rules and lack of any definition in the Building Societies Act.

If that's true, then there's no conspiracy here.

FWIW I think members are not very well positioned to make a judgment on these things and are likely to be prejudiced against any such move - which is problematic for a business with an eye on growth. The arrangement of a building society is such that you trust an executive team to get on with the business and, aside from the ability to oust them at AGM, you leave them to it.

If they want to add or remove the word 'building society' from the logo, they can do that.  If they want to dish out a surplus according to the society's internal definition of a "committed member" they can do that. If they want to launch a loss-leading savings account or mortgage rate they can do that. If they are well placed to takeover a competitor, they can do that.

Further - to the allegation that the executive at the top making these decisions have nothing to lose if these takeovers go awry - I would put it to you that reputation is everything in this game and market perception of failure will likely be the end of their careers in finance, see Fred Goodwin, Alex Hornby and Paul Flowers among others. On the contrary, I would put it to you that signature moves like these are far more risky for those at the top of Nationwide personally than members.

DS_MSE

WillPS  I did not suggest this was a 'Conspiracy' nor did I state 'that no "consideration" had already taken place'.

Nationwide clearly haven't dream't up this acquisition up overnight, will have no doubt been quietly eyeing up and negotiating the possibility of Buying Virgin Money for some considerable time and I assume / hope will have been conducting a thorough review of Virgin Money's Financial Status.

However the Issue I have as a longstanding Member of the Society is the way that Nationwide repeatedly continue to bang the 'Mutual Status' Drum when its suits them and in this case state 'We have taken the comments received from members into account'  but after officially informing Members of their their intentions on or around 11th March, as far as I can see, provided no official platform, means or time frame in which to gauge the opinion of its Members, not that they wanted or needed to do this, but which Nationwide repeatedly states it values so much ! 

As such without any evidence to the contrary this statement is just 'PR Spin' because it sounds good so why did they feel they needed to include this statement, as we all know they don't want or need to know the views of its Members and aside of realistically having absolutely no influence on Nationwide's decision to proceed with the acquisition, perhaps in truth don't exist in any significant quantity and have not been 'taken into account' .

For me Nationwide is no longer any different to any other Financial Organisation be that Mutual or PLC other than the fact over the past 12 Mths it has consistently paid significantly lower Savings Rates than many of its competitors which has no doubt in part, funded the vast increase in profits that now puts Nationwide in a stronger financial position to purchase a Competitor such as Virgin Money.

In so far as reputation I don't know about Paul Flower's ! but I suspect neither Fred Goodwin or Andy Hornby are having to visit their local Food Bank and just hope for everyone's sake that Debbie Crosbie doesn't join this illustrious list of former Banking Executives.

WillPS

DS_MSE said:

I did not suggest this was a 'Conspiracy' nor did I state 'that no "consideration" had already taken place'.

Nationwide clearly haven't dream't up this acquisition up overnight, will have no doubt been quietly eyeing up and negotiating the possibility of Buying Virgin Money for some considerable time and I assume / hope will have been conducting a thorough review of Virgin Money's Financial Status.

However the Issue I have as a longstanding Member of the Society is the way that Nationwide repeatedly continue to bang the 'Mutual Status' Drum when its suits them and in this case state 'We have taken the comments received from members into account'  but after officially informing Members of their their intentions on or around 11th March, as far as I can see, provided no official platform, means or time frame in which to gauge the opinion of its Members, not that they wanted or needed to do this, but which Nationwide repeatedly states it values so much ! 

As such without any evidence to the contrary this statement is just 'PR Spin' because it sounds good so why did they feel they needed to include this statement, as we all know they don't want or need to know the views of its Members and aside of realistically having absolutely no influence on Nationwide's decision to proceed with the acquisition, perhaps in truth don't exist in any significant quantity and have not been 'taken into account' .

The statement from Nationwide was "we have taken the comments received from members into account". I can't quite tell if your beef with that statement is that it's insufficient in its detail or in fact. The answer to both concerns is similar.

If you don't think merely considering the views of members is sufficient - they would be in breach of rule 13.1 of The Takeover Code if they opened opened a dialogue in any meaningful way as they would be seeking a subjective judgment.

If you think that there should be more detail of what they did with the views they received anyway despite not seeking subjective judgments... I don't really see what detail they could possibly provide. Even if they sorted unwarranted commentary in to broadly 'for' or 'against' they'd risk implicating a breach of the above rule.

In short, you're saying they should have given you an opportunity which they are legally proscribed from doing.

DS_MSE said:

For me Nationwide is no longer any different to any other Financial Organisation be that Mutual or PLC other than the fact over the past 12 Mths it has consistently paid significantly lower Savings Rates than many of its competitors which has no doubt in part, funded the vast increase in profits that now puts Nationwide in a stronger financial position to purchase a Competitor such as Virgin Money.

An alternative view is that they're making hay while the sun shines by taking a rare opportunity to significantly enlarge the business following an unexpected surplus as a result of the sudden interest rate rises following more than a decade of rates being held extremely low.

If you're not happy with how your Building Society is being managed you have levers you are free to waste your time with at AGM. Alternatively you can resign your membership, or simply do as what I assume the majority of members do and treat them no differently to a bank, safe in the knowledge your deposits are protected equally.

DS_MSE said:

In so far as reputation I don't know about Paul Flower's ! but I suspect neither Fred Goodwin or Andy Hornby are having to visit their local Food Bank and just hope for everyone's sake that Debbie Crosbie doesn't join this illustrious list of former Banking Executives.

I should imagine not, no - nor for that would any member in the result of a disasterous 'complete failure'  scneario as FSCS protection would prevent it. The membership itself cannot be traded and is valueless, so comparisons with former shareholders in Northern Rock etc who were wiped out are also duff.

Having your career bought to an abrupt end is a very real risk of being a high profile banking executive. I'm not trying to get out the tiny violins here, I'm just challenging the notion that they are able to act callously with no potential repurcussions.