THURSDAY 23RD MAY 2024

FOR IMMEDIATE RELEASE

Nationwide’s bumper profits are “hurting members everyday”, Virgin Money takeover will only “compound the misery”, and Fairer Share payment labelled an “ineffective bribe for a few, and an unfair, empty gesture for most.” “Never in the 250 year history of the building society movement was so much taken from so many by so few.”

Swindon, UK – The campaign to “Give Nationwide Members a Say on the purchase of Virgin Money” has expressed concern that Nationwide’s bumper profits are at the expense of members who should be receiving better rates during a cost of living crisis. Instead, the society is stockpiling cash to fund the proposed acquisition of Virgin Money.  

The society’s own polling suggests that less than half of the membership supports the proposed deal[1], and the society has admitted to denying members a say on a technicality using Virgin Money’s investments in derivatives to fail the legal test for a vote[2].

While Nationwide members have not been able to vote on their proposed purchase, 89% of Virgin Money shareholders voted for their sale this week[3]. This is unsurprising, given Virgin Money’s recent (unaudited) trading update showed that profits are slipping and future performance looks poor.

The campaign is concerned that the proposed takeover of Virgin Money could only compound the misery for members, as it will reduce competition, lower the financial strength of the society, and result in worse outcomes for members. However, the society continually refuses to acknowledge any of the costs or risks associated with the deal.

The proposed takeover is still subject to regulatory approval from the FCA, PRA and CMA – and if it does go ahead, is unlikely to complete before October. 

Ahead of the Annual General Meeting of the membership in July, the society has announced a “Fairer Share” payment of £100. With only 25% of members eligible to receive the payment, due to the society’s eligibility criteria, the campaign considers this discretionary award as cold comfort to those due to receive it, who would rather Nationwide offered better rates on mortgages and savings accounts, and an “unfair, empty gesture for most of the membership who have not been given a say” in the once in a generation change to the society that the proposed takeover of Virgin Money represents.

Mikael Armstrong, leader of the campaign to “Give Nationwide Members a Say on the purchase of Virgin Money” [4] with over 5,000 supporters, commented:

“Never in the 250 year history of the building society movement was so much taken from so many by so few. The directors of Nationwide building society are refusing 16 million members a vote on the proposed takeover of Virgin Money, using a technicality to circumvent the law.

“With less than half supporting the deal – according to the society’s own extensive polling – today’s results will only compound the misery of members struggling to make ends meet during a cost of living crisis. Instead of offering members better rates on mortgages and saving accounts, Nationwide is hurting members everyday, hoarding cash to fund the acquisition of Virgin Money – that not a single member has voted for, and no other organisation wants to buy. 

“To make matters worse, Nationwide has announced a £100 “Fairer Share” payment ahead of the July AGM, which the campaign considers an ineffective bribe for a few, and an unfair, empty gesture for most, with only 25% of members expected to receive it.

“Given the results announced today, instead of pursuing the Virgin Money acquisition, Nationwide could return 10x as much to members – either in the form of better rates or through a greater share of the society’s profits. 

“Ironically it is Virgin Money, a bank run in the interests of shareholders, that is offering more competitive savings and mortgage rates than Nationwide, which is supposed to be run in the interests of its members. Virgin Money appears to be competing in the market whilst Nationwide is treating its loyal customers as a cash cow to fund a vanity project for management.”

ENDS

### NOTES TO EDITORS ###

1. Almost half Nationwide members back £2.9bn merger with Virgin Money, finds poll, ThisIsMoney, 21 April 2024 https://www.thisismoney.co.uk/money/markets/article-13333117/Almost-half-Nationwide-members-2-9bn-merger-Virgin-Money-finds-poll.html
   
2. Campaign press release, 3 May 2024 https://nationwide-virgin-money-member-vote.org.uk/2024/05/03/nationwide-members-demand-clarity-and-balance-on-proposed-virgin-money-deal-and-rationale-for-denying-vote/
   
3. Virgin Money shareholders approve £2.9bn Nationwide takeover, CityAM, 22 May 2024
   https://www.cityam.com/virgin-money-shareholders-approve-2-9bn-nationwide-takeover/ 
   
4. Campaign petition with over 5,000 signatories https://www.change.org/p/give-nationwide-members-a-say-on-the-purchase-of-virgin-money   

Contact the campaign to “Give Nationwide Members a Say on the purchase of Virgin Money” by email at: NWVMvote@gmail.com

Learn more about the campaign via the website at: https://nationwide-virgin-money-member-vote.org.uk/about/