Nationwide take over of Virgin Money

Rob5342

Section62 said:

blue.peter said:

Krok414 said:

No ill effects on existing Nationwide members? Is it a coincidence that on the day they announce their intention to spend £2.9 billion on an aquisition of Virgin Money, they announce that the interest rate on my Nationwide Credit Card will go up by more than 50% ?

Yes, it is a coincidence. The fact that your increase is 50% of the existing interest rate only reflects that fact that that interest rate was low to begin with. I'll bet that the increase was, like mine, five percentage points. If you take a look at the Credit Cards board, you'll see threads there about other card issuers also increasing their interest rates by similar amounts. The Nationwide increase is in line with the market in general.

This is the point though - Nationwide is meant to be a mutual and being a mutual is supposed to bring benefits to members.

Does being a muutal have any practical benefit though? I had a current account with them for four years some time ago (before apps mattered), and I don't rememeber any differences over the other accounts I'd had

Section62

WillPS said:

But you're also trying to have it both ways now - you want them to benchmark against other building societies for the small set of products/services they both have, but you want them to offer an enhancement on the market for the things they only compete with banks for.

Not sure why you characterise that as "trying to have it both ways".

What I want is for Nationwide to demonstrate the benefits of mutuality by actions not words.  By being a mutual they should be able to outcompete banks in offering good value products.

As the largest mutual building society in the world they should be able to use their size to provide better value products than the minnow building societies.

Being better than the banks and better than smaller building societies is complementary, not "trying to have it both ways".

If Nationwide were skint then it would be understandable that they couldn't afford to provide better products.  But as we are often reminded, Nationwide have so much excess profit that they can afford to hand some of it back as a "fairer share".  So please, no complaining that Nationwide have to offer worse products (and reduce existing member benefits) because they can't afford to do better for members.

WillPS

Rob5342 said:

Section62 said:

blue.peter said:

Krok414 said:

No ill effects on existing Nationwide members? Is it a coincidence that on the day they announce their intention to spend £2.9 billion on an aquisition of Virgin Money, they announce that the interest rate on my Nationwide Credit Card will go up by more than 50% ?

Yes, it is a coincidence. The fact that your increase is 50% of the existing interest rate only reflects that fact that that interest rate was low to begin with. I'll bet that the increase was, like mine, five percentage points. If you take a look at the Credit Cards board, you'll see threads there about other card issuers also increasing their interest rates by similar amounts. The Nationwide increase is in line with the market in general.

This is the point though - Nationwide is meant to be a mutual and being a mutual is supposed to bring benefits to members.

Does being a muutal have any practical benefit though? I had a current account with them for four years some time ago (before apps mattered), and I don't rememeber any differences over the other accounts I'd had

Did any of them pay you £100 last year for using their services without advising beforehand that they were going to do so? Did/do any of them offer an 8% interest saver?

Section62

WillPS said:

Did any of them pay you £100 last year for using their services without advising beforehand that they were going to do so?

That one has been done to death on other threads already - you probably won't agree, but some of us think that approach to distributing profit is the antithesis of how a mutual should work.

WillPS said:

Did/do any of them offer an 8% interest saver?

Monmouthshire BS.  And they outdid Nationwide by paying 8% on £300/month compared to £200/month for NW.  Monmouthshire also launched their product before Nationwide.

And Saffron BS offered 9% to 'loyalty' members, albeit on only £50/month.

WillPS

Section62 said:

WillPS said:

Did any of them pay you £100 last year for using their services without advising beforehand that they were going to do so?

That one has been done to death on other threads already - you probably won't agree, but some of us think that approach to distributing profit is the antithesis of how a mutual should work.

WillPS said:

Did/do any of them offer an 8% interest saver?

Monmouthshire BS.  And they outdid Nationwide by paying 8% on £300/month compared to £200/month for NW.  Monmouthshire also launched their product before Nationwide.

And Saffron BS offered 9% to 'loyalty' members, albeit on only £50/month.

@Rob5342 was asking for advantages to banking with a mutual. MonBS and Saffron BS were, last time I checked, mutuals, no?

Glad you acknowledge Nationwide's offer was indeed among the most generous of those available last year tho.

WillPS

Section62 said:

WillPS said:

But you're also trying to have it both ways now - you want them to benchmark against other building societies for the small set of products/services they both have, but you want them to offer an enhancement on the market for the things they only compete with banks for.

Not sure why you characterise that as "trying to have it both ways".

What I want is for Nationwide to demonstrate the benefits of mutuality by actions not words.  By being a mutual they should be able to outcompete banks in offering good value products.

The credit card in question isn't poor value tho, is it?

Section62 said:

As the largest mutual building society in the world they should be able to use their size to provide better value products than the minnow building societies.

Like a range of current accounts and a credit card, you mean? Or more like the sometimes chart-topping regular saver they've offered?

Section62 said:

Being better than the banks and better than smaller building societies is complementary, not "trying to have it both ways".

You responded to another thread contributor talking about a rise in their Nationwide credit card's APR. Your allegation was they should be able to do better. Which building society offers a better credit card, please? You can compare APR or choose any other comparator you like to justify your argument.

Section62 said:

If Nationwide were skint then it would be understandable that they couldn't afford to provide better products.  But as we are often reminded, Nationwide have so much excess profit that they can afford to hand some of it back as a "fairer share".  So please, no complaining that Nationwide have to offer worse products (and reduce existing member benefits) because they can't afford to do better for members.

Please substantiate how you perceive a 14.9% credit card to be a "worse product". Worse than what?

Pardon me for being so bold as to say it, but my hunch is that really you are not responding to the post you quoted at all, but more trying to have a general moan about Nationwide... and bringing up the fairer share scheme to bolster that argument (which is convenient when it suits, but is apparently 'done' when anyone else brings it up as a plus point).

Zanderman

ircE said:

Nationwide's app is not that bad, although I say that as a Co-operative Bank sufferer.

So first Coventry BS goes for Co-op Bank, now Nationwide BS goes for Virgin. What next, Yorkshire BS to go for TSB? Skipton BS to go for Shawbrook? Why the sudden interest from Building Societies in challenger banks?

I wouldn't describe the Coop (founded 1872), or TSB (founded 1810) as 'challenger banks'. Small, or medium sized perhaps, but not 'challenger banks' in the sense of new kids on the block trying to shake things up. Not like Metro, or Starling, or Monzo.

Even Virgin Money is, in its current incarnation, quite old and well-established as much of its banking business comprises the well-established (and frequent in the north of the UK) Yorkshire Bank (founded 1859)/Clydesdale Bank (1838) which it took over a couple of years ago. 

WillPS

Zanderman said:

ircE said:

Nationwide's app is not that bad, although I say that as a Co-operative Bank sufferer.

So first Coventry BS goes for Co-op Bank, now Nationwide BS goes for Virgin. What next, Yorkshire BS to go for TSB? Skipton BS to go for Shawbrook? Why the sudden interest from Building Societies in challenger banks?

I wouldn't describe the Coop (founded 1872), or TSB (founded 1810) as 'challenger banks'. Small, or medium sized perhaps, but not 'challenger banks' in the sense of new kids on the block trying to shake things up. Not like Metro, or Starling, or Monzo.

Even Virgin Money is, in its current incarnation, quite old and well-established as much of its banking business comprises the well-established (and frequent in the north of the UK) Yorkshire Bank (founded 1859)/Clydesdale Bank (1838) which it took over a couple of years ago. 

It's a pretty vague term. The media seem to take the view that it means any organisation offering banking services which rival the 'big 4 [or 5]' (LBG, Natwest Group, Barclays, HSBC [and Santander]). Virgin Money repeatedly referred to themselves as 'best placed Challenger' and similar, despite originally being a JV with MBNA (f. 1982), then being a rebrand of Northern Rock (f. 1965) then finally being being a brand applied to Cyldesdale Yorkshire (f. 1839 and 1859 respectively).

This definition means that neobanks (Metro, Starling, Monzo, Atom, Tandem etc) is a subset of Challengers (which also included Tesco Bank, Nationwide, Co-op Bank, etc) rather than a synonym. Arguably it make a little more sense if you look up the definition of 'challenger' (which doesn't describe age).

I personally tend to use neither term as I don't think either is very well defined.

Section62

WillPS said:

Section62 said:

WillPS said:

Did any of them pay you £100 last year for using their services without advising beforehand that they were going to do so?

That one has been done to death on other threads already - you probably won't agree, but some of us think that approach to distributing profit is the antithesis of how a mutual should work.

WillPS said:

Did/do any of them offer an 8% interest saver?

Monmouthshire BS.  And they outdid Nationwide by paying 8% on £300/month compared to £200/month for NW.  Monmouthshire also launched their product before Nationwide.

And Saffron BS offered 9% to 'loyalty' members, albeit on only £50/month.

@Rob5342 was asking for advantages to banking with a mutual. MonBS and Saffron BS were, last time I checked, mutuals, no?

Yes, they are mutuals as well.

I think Rob5342 was asking the question "Does being a muutal have any practical benefit though? I had a current account with them..." in relation to Nationwide specifically, because he was quoting and replying to my point "Nationwide is meant to be a mutual and being a mutual is supposed to bring benefits to members".  I could be wrong though, and perhaps Rob5342 could clarify?

The point though is Nationwide is not offering something better than another mutual does, even though it is much bigger and should be able to leverage economies of scale.

WillPS

Section62 said:

WillPS said:

Section62 said:

WillPS said:

Did any of them pay you £100 last year for using their services without advising beforehand that they were going to do so?

That one has been done to death on other threads already - you probably won't agree, but some of us think that approach to distributing profit is the antithesis of how a mutual should work.

WillPS said:

Did/do any of them offer an 8% interest saver?

Monmouthshire BS.  And they outdid Nationwide by paying 8% on £300/month compared to £200/month for NW.  Monmouthshire also launched their product before Nationwide.

And Saffron BS offered 9% to 'loyalty' members, albeit on only £50/month.

@Rob5342 was asking for advantages to banking with a mutual. MonBS and Saffron BS were, last time I checked, mutuals, no?

Yes, they are mutuals as well.

I think Rob5342 was asking the question "Does being a muutal have any practical benefit though? I had a current account with them..." in relation to Nationwide specifically, because he was quoting and replying to my point "Nationwide is meant to be a mutual and being a mutual is supposed to bring benefits to members".  I could be wrong though, and perhaps Rob5342 could clarify?

The point though is Nationwide is not offering something better than another mutual does, even though it is much bigger and should be able to leverage economies of scale.

So the advantage to having a current account with a mutual over anyone else (presuming @Rob5342 doesn't live in one of the handful of postcode letters in the North West which are eligible for Cumberland's account) last year was a potential £100 payment. The fairer share scheme. Which they're doing again, it seems.

But you've arbitrarily declared I can't point that out so...