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Frequently Asked Questions (FAQ)

Last updated 10 April 2024


Q1. Hasn’t the deal already been completed?

A1. No. The deal is yet to be confirmed - requiring a vote of Virgin Money shareholders, a commercial court ruling and approval of UK regulators (Competition and Markets Authority, Financial Conduct Authority & Bank of England). While terms may have been agreed, it is not a “done deal”.



Q2. Isn’t a member vote illegal?

A2. No. The legal advice that the Nationwide board and management are relying on (from their own advisors who are likely motivated for this deal to go through for the success fees) that a vote is not possible or permissible has not been published. As Virgin Money does not make the majority of its income from mortgages, and is greater than 15% of the size of Nationwide - under section 92A subsections 1, 3 & 4 of the Building Society Act - it is the opinion of the campaign that a resolution passed by members appears is needed. See https://www.legislation.gov.uk/ukpga/1986/53/section/92A



Q3. Won’t the combined group be better off / financially stronger if the deal goes ahead?

A3. No. This argument has been put forward by the Nationwide board and management, but it has not been substantiated. It is expected the acquisition (£2.9+ billion) and integration costs (estimated £1+ billion) will be financed by the society reserves (ie. member capital). Nationwide, which provides 1 in 10 UK mortgages, will be significantly weaker with a lower capital ratio and a higher leverage ratio, if this deal goes ahead.

Note that Nationwide admits it will be have a weaker capital ratio as an outcome of their proposed deal, with a drop from 27% (see the 2023 Annual Report) to 20% in CET1% as per the 21 March 2024 takeover document, which states:

"Nationwide expects the Combined Group to have a strong pro-forma capital position with a common equity tier 1 ratio of approximately 20 per cent."

Source: 21 March 2024 Takeover document - see the first paragraph at the top of page 29 of the PDF.

Compare this with the 2023 Annual report - source of 26.5% ie. 27% to the same degree of accuracy

The campaign estimates a CET1% drop to 18% is more realistic, when post acquisition, integration and restrcuturing costs are taken into account (estimated at £1+ billion)..



Q4. Can members vote on the deal even though Nationwide board and management have so far ruled this out?

A4. Yes. The rules of the society stipulate that members can bring a Special General Meeting (SGM) provided enough members request this. Section 14 of the rules outlines the arrangements.. 

At a SGM, members can put forward a resolution to a vote of the members in attendance. The intention of the campaign is to call a SGM and pass a binding resolution at the meeting that states: “the takeover of Virgin Money must not proceed without the approval of a majority of Nationwide members.”

This would mean that if Nationwide wants to proceed with the takeover, it would need to hold a ballot of all eligible members. The deal could then only proceed if a majority of members support it.



Q5. Who are the members of Nationwide, who is eligible to request a SGM, vote etc.?

A5. The Nationwide rules govern the membership of the society and can be found here: 

https://nationwide.co.uk/-/assets/nationwidecouk/documents/about/membership-matters/g10-memorandum-and-rules.pdf

Most customers of Nationwide are members of the society, and are therefore eligible to attend and vote at meetings, and can vote if balloted. Typically, you are a member if you either have a mortgage, current or savings account with Nationwide.

If you have funds via an eligible current or saving account, it is referred to as a “share investment” (because you are investing in the society and share in its benefits) and you are referred to as an “investing member”.

If you have a mortgage with Nationwide only, you are referred to as a “borrowing member”.

Both investing and borrowing members are eligible to attend general meetings, and vote on resolutions put to members. You do not get more votes if you have more money or more accounts - the principle is one member, one vote.

In order to bring about a Special General Meeting under Section 14 of the rules, 500 “two-year qualifying members” must request this in writing. Two-year qualifying members are defined as investing members who have held £100 or more in deposit, or borrowing members that have owed £100 or more on their mortgage over the last two years.

Those members requesting a SGM must also put up a refundable deposit of £50 "for each" member making the request. The campaign interprets “for each member” to mean that a subset of requesting members can pay the deposit on behalf of the group. Therefore a refundable deposit of £25,000 - £50 for each of the first 500 requesting qualifying two-year members - was handed in as a cheque on behalf of all members with the petition on 11th April 2024 to ease the burden of administration for all parties, as per the society’s rules.

The deposit is only non refundable in two circumstances, if a meeting is held and quorum (10 members in attendance) is not reached, and/or a resolution is passed by the members at the meeting that costs of the meeting should be deducted from the deposit.



Q6. Didn’t Nationwide already carry out a poll of their members?

A6. There have been references in the press to an informal poll with a small 150 person sample size carried out by Nationwide management.  However management have not been transparent as to how and when this was conducted, nor have they published the full results.