5K supporters, sneaky swap income, misleading communications debunked, and more great press coverage

5th May 2024

Dear all,

Thank you all 5,000+ of you for your continued support for the campaign to Give Nationwide Members a Say on the purchase of Virgin Money.

A bumper update for you for the May day bank holiday – I hope you’re enjoying the long weekend.

We now have:

  • 5,000 signatories to the petition
  • clarity from Nationwide’s board as to how they are denying members a vote on the acquisition – but we’re still challenging whether it’s morally and legally safe
  • a detailed rebuttal to Nationwide’s response to supporters’ SGM requests
  • a lot more press coverage (MSE, Mail, CityAM, Standard etc.)
  • 250 active supporters on Facebook
  • and 1 co-ordinated campaign

Contents of this update:

  1. “SNEAKY” Nationwide using swap income to deny members a vote
  2. Campaign’s detailed REBUTTAL to Nationwide’s answer denying the SGM request
  3. Nationwide AGM – do not agree to a quick vote!
  4. Virgin Money shareholders will VOTE this month
  5. Campaign in the PRESS
  6. Call for VOLUNTEERS
  7. Direct ACTION you can take, while Nationwide deliberate
  8. Please SUBSCRIBE to our email list

1/ “SNEAKY” Nationwide using swap income to deny members a vote

On Thursday morning, some EIGHT weeks after the deal was first announced, the Society Secretary, Jason Wright, emailed me to finally admit HOW Nationwide was circumventing the law to deny members a vote.

The campaign has shown previously that Virgin Money’s mortgage income was less that 50% of total income, and so a vote is needed as per our interpretation of Section 92A of the Building Societies Act (1986).

However Nationwide has now explained that by including Virgin Money’s swap income, i.e. the accounting revenue earned from Nationwide’s trading of derivatives with other financial institutions, the board is confident that a vote is not legally required. We do not believe this is morally of legally safe.

This news was reported in today’s Mail on Sunday (online via ThisIsMoney) by Patrick Tooher. Lib Dem peer Baroness Bowles, who sits on the London Stock Exchange’s board, was quoted in the piece: ‘It does seem that Nationwide is being somewhat sneaky by including swap income.‘ 

We’re continuing the fight for members’ voices to be heard and will be amplifying our activity to pressure Nationwide (and if necessary get HM Treasury, Regulators and Parliament to intervene) to push pause on this proposed deal until a member vote is scheduled. We will also look for ways to challenge the society’s opinion regarding the inclusion of swap income – these financial derivatives were in their infancy when the act was written in 1986.

You may wish to read the press release issued this this week by the campaign for more information.

2/ Campaign’s detailed REBUTTAL to Nationwide’s answer denying the SGM request

Also included in this week’s press release was a strong, very detailed rebuttal to Nationwide’s most recent comms to campaign supporters. Many of the campaign’s supporters had written to Jason Wright to request a SGM. In Nationwide’s reply to members, denying the request, and deeming it not valid, the society continued to communicate it’s support for the deal in a one-sided manner that lacked any form of balance, or even a single acknowledgement of the costs and risks of the proposed deal. The communication also continues to refer to the proposed deal as a certainty, when it is still subject to a Virgin Money shareholder vote, and the approval of three different regulators, at a minimum.

Please see the appendix at the end of the press release, and a PDF of the correspondence for more information.  We continue to publish correpsondence between the scoiety and the campaign in full given the considerable member and media interest in this situation.

Nationwide refuses to answer clear questions – including whether there will be any retaliation or repercussions against members (e.g. being de-banked) who are raising valid concerns.

Despite this, the campaign now has over 5,000 supporters – with over 1,000 joining in the last week despite limited press.  

Members continue to tell us they are withdrawing most of their funds from the society because of Nationwide’s behaviour towards the membership, and to get a better deal given higher rates elsewhere.

This issue is broader than Nationwide members given the proposed takeover of The Co-operative Bank by the Coventry Building Society, which is also denying its members a vote on the deal.

We expect to submit a new SGM request at the end of the 4 months lockout period, that surrounds the July AGM, i.e. early September.

3/ Nationwide AGM – date and agenda TBC

In parallel, we continue to prepare for what can be achieved at the AGM. The date for the AGM is still yet to be announced, despite Nationwide beginning to send out “Make your vote count this June”  email notices to members.

PLEASE DO NOT CLICK ON QUICK VOTE OPTION if you get an email about the AGM, as that way you reserve the right to consider and vote on all items on the agenda individually, once they are disclosed. Please also subscribe to our mail list so that we can get in touch with you directly nearer the time with the campaign’s view on the agenda and the voting choices.

4/ Virgin Money shareholders will VOTE this month

We are STILL awaiting publication of the decision from a High Court hearing on 19th April. However Nationwide and Virgin Money have released the scheme documentation on the basis that all Virgin Money shareholders can vote in a single class, including Virgin Group / Richard Branson.

The scheme documentation refers to two votes for Virgin Money shareholders ahead of a general meeting 22 May 2024 in Newcastle:

  • 50% vote needed in favour of the resolution on the revised Trade Mark Licensing Agreement (TMLA). This in favour of amendments to the deal between Virgin Money and Virgin Group, but the financial implications are still the same: Virgin Group / Richard Branson will be paid a £250 million exit fee if the deal goes through, and £15M per year thereafter if Nationwide continue to use the Virgin Money brand (which is their attention for several years).
  • 75% vote needed in favour of the offer made by Nationwide to buy Virgin Money shares for 220p per share. This is a ~40% premium to the price Virgin Money was trading at before the deal was proposed. It is possible that some Virgin Money reject the offer, e.g. some shareholders decide to hold out for a better offer.

5/ Campaign in the PRESS

We continue to do our best (given our limited resources) to amplify our message and reach as many members as possible. There is a lot of bad advice and incorrect information circulating too. Our highlights from this week:

6/ Call for VOLUNTEERS!

We remain a campaign operated by a handful of part-time volunteers. We would welcome support in the following areas from volunteers to join the campaign team – please contact the campaign by email if your can help

  • Public Relations – to help manage our message with the press and other key stakeholders
  • Journalists, copy writers, editors etc. – to help amplify our message, write and edit articles
  • Legal experts – given Nationwide’s refusal to abide by the spirit of the law and give members a vote, and the proposed Amendments underway to the Building Societies Act (1986)
  • Fund raising experts – to consider whether a campaign fund is needed and how to raise money
  • Website and graphic designers – to help grow, improve and maintain the website
  • Marketing /growth experts – to identify clever ways to extend the reach of the campaign
  • Social media / community managers – given our dedicated Facebook group
  • Project managers / administrators – there’s a lot going on and we want to stay co-ordinated as we grow

7/ Direct ACTION you can take, while Nationwide deliberate6 ways you can support the campaign that take just 5 minutes

  • Please consider taking action to emphasise and amplify our concerns regarding the proposed takeover of Virgin Money by the Nationwide. We have provided templates for to use/adapt – so it only take a few minutes of your time.
  • Move your money elsewhere, its the best way to protest to Nationwide (and you’ll likely earn a better rate)
  • Email your local MP, government and Parliament could act to stop or delay this deal
  • Raise a concern with the FCA, who should be made aware of how Nationwide is behaving to its members
  • Request a Special General Meeting, while we interrogate Nationwide as to why it’s “not valid”
  • Sign the petition on change.org, it’s a visible way to demonstrate the growing strength of our support base
  • Join the Facebook group, it’s a great way to interact, learn from others and share ideas and perspectives

8/ Please subscribe to our EMAIL list

Sending updates via Change.org isn’t particularly reliable. So we are now building a mail list. To subscribe please send us an email with the subject SUBSCRIBE. You can read our Privacy Policy on the campaign website.

Finally, thank you everyone who has supported the campaign thus far. We knew from the outset that this was likely to a long and winding road – and so far that is exactly how it’s turned out. Read “About the campaign” on the website to if you’d like to catch up / understand what’s gone to date.

Mikael Armstrong
Campaign leaderGive Nationwide Members a Say on the purchase of Virgin Money

5K supporters, sneaky swap income, misleading communications debunked, and more great press coverage

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