Nationwide considering acquiring Virgin Money - now complete

Just received this email from Nationwide Building Society who as the title suggests are considering acquiring Virgin Money ;

Sky News Article

An important message for our members

I am writing to you as a valued member of Nationwide Building Society to inform you of an important development in Nationwide’s strategy.

Nationwide has grown to become the UK’s largest building society by successfully acquiring and integrating more than 250 other organisations during its 140-year history. We have now announced that we are considering making an offer to acquire Virgin Money.

If the acquisition proceeds, it will accelerate our strategy and create a stronger and more diverse business that is better placed to deliver financial value to our members, both now and in the future.

Importantly, Nationwide will remain a building society.

The combination of our businesses would put us in a stronger position to continue to provide Fairer Share Payments to our eligible Nationwide members, better value mortgages and savings, and leading customer service. Over time, we would aim to provide a wider range of products and services to our customers and members, including Virgin Money’s well-established business banking services.

A combined group would deliver the benefits of fairer banking and mutual ownership to more people in the UK. Nationwide remains wholly committed to being a modern mutual that can meet all its members’ banking needs. 

Whilst this would mark another exciting chapter in our history, there is more work to be done and there is no guarantee that we will make a firm offer, nor that it would be accepted by Virgin Money's shareholders.

I can assure you that we will let you know if and when a firm offer is made. In the meantime, you can see the formal regulatory announcement HEREand answers to the key questions you might have HERE.We are strictly limited by regulation regarding any further comments, but we will continually update the page with any additional announcements that we issue in connection with the possible offer.

In the meantime, we will continue to focus on delivering our Purpose. Banking – but fairer, more rewarding and for the good of society. 

Yours sincerely,

signature

Kevin Parry
Chairman  

Yeah saw the news story on this, says they will keep the brand initially but phase it out over 6 years. Does that mean no more VA credit cards earning airmiles?? Hopefully not!

[mitchja]

Received the same as I have a FlexPlus Nationwide current account here. Been with them for years now and Nationwide are pretty good in general.

Be interesting to see what happens to the VS credit cards though?

I wouldn't be surprised to see Newday try to get the virgin credit brand, they lost a lot after losing the amazon one.

I’d imagine the VS card will just move to someone else.

You can’t be an airline nowadays and not have a credit card.

I suspect somebody else will take on the credit card. Being a Nationwide customer (member?), it would not be like them to run a credit card on behalf of third parties.

As an aside, it’s worth pointing out that Nationwide’s own credit card offers commission-free purchases on foreign transactions. That’s the main reason why I have that along with a VS credit card.

Agreement has been signed with Virgin Enterprises for 4 years after which time Nationwide need to rebrand. Interesting within all this - Nationwide will begin discussions with Virgin over support for Virgin Red as part of the agreement and using it within existing products.

Bit disappointing that Nationwide customers have received some comms about this but Virgin Money customers haven't!

Will be very interesting to see what happens re. the credit card as this currently funds all of my flying!

Bit disappointing that Nationwide customers have received some comms about this but Virgin Money customers haven't!

Will be very interesting to see what happens re. the credit card as this currently funds all of my flying!

I suspect is because it’s subject to shareholder approval at VM’s side, so until that happens there’s no news to report?

EDIT: I have since received an e-mail advising of the proposed takeover.

I got this last night

“ Hello,

You may have seen in the news that we’re in discussion with Nationwide Building Society about the possibility of bringing our businesses together. We announced to the stock market that we have reached a preliminary agreement on the potential sale of Virgin Money to Nationwide.

The Boards of Virgin Money and Nationwide believe that this potential acquisition would combine two complementary businesses, making for a stronger combined group and providing customers with a wider range of products.

There’s lots being discussed and at this stage there’s no certainty that any firm offer will be made.

Please be reassured that there is no impact to your Virgin Money (including Clydesdale and Yorkshire Bank) products or services and you can continue to use these as normal. Just so you know, there are no changes to FSCS deposit protections as a result of these discussions.

If you’re in the process of opening a Virgin Money account, or any of our other products, you can continue as planned. Our teams are as committed, as ever, to delivering great service for you.

Thanks for continuing to be a loyal customer.

David Duffy
CEO”


(Was an existing Clydesdale Bank customer)

David

Agreement has been signed with Virgin Enterprises for 4 years after which time Nationwide need to rebrand. Interesting within all this - Nationwide will begin discussions with Virgin over support for Virgin Red as part of the agreement and using it within existing products.

Probably ties in with the news about how Nationwide would keep the existing VM branch network for a period before moving to close duplicate branches in towns and cities where Nationwide and VM already exist.

Branches kept until early 2026 which tbh, isn't that far away if the merger completed tail end of this year. Gives them a year to set out how they deliver the synergies needed for a reshaped branch network. Nationwide have made some big commitments re: branches which by 2026 (in my opinion) will need to be dropped. I would suggest they'll use the VM merger as the start of them reshaping. 2025 focus on the IT Integration and slim down staffing to such a level via attrition that closures are actually not that difficult...

[mitchja]

It's also interesting that the VM Club M packaged current account seems to be in direct competition with Nationwide's FlexPlus packaged current account as originally the Club M account was around ~£15 per month but VM dropped that to £12.50; funny as Nationwide charge £13 per month for theirs!

Those 2 accounts are always the top 2 on Martin Lewis's top packaged accounts list. There's not much in them in terms of benefit differences, however, VM do still pay you interest on balances up to £1000. Nationwide stopped paying interest on current accounts a few years ago now. Nationwide also still don't offer cheque imaging from their app whereas I believe VM do offer that function....though I cant remember when I last needed to pay a cheque in anyway?

(I too also don't believe Nationwide's promise to keep branches open will be sustainable in the long term either; even before this announcement was made)

Virgin would be mad not to continue with a credit card, otherwise everyone will decamp to Barclays for the Avios card

[mitchja]

I have absolutely no doubt VS will carry on with a branded credit card as there are many card providers out there. VS used MBNA before they switched to Virgin Money.

Oh the irony James if they end up going back to MBNA - in our family we had both the regular and + cards under MBNA and when they switched provider MBNA switched our accounts to their own reward cards.

Obviously we didn't want these, but have spent literally years trying to cancel them and they keep sending us new ones!

Oh the irony James if they end up going back to MBNA - in our family we had both the regular and + cards under MBNA and when they switched provider MBNA switched our accounts to their own reward cards.

Obviously we didn't want these, but have spent literally years trying to cancel them and they keep sending us new ones!

I seem to recall MBNA moved ex-VS CC customers onto the ‘Horizon’ card that wasn’t available to anybody else in an attempt to keep those customers. I cancelled mine as I didn’t see the need to hold yet another card.

It wouldn’t surprise me if things go full circle in that regard, though we’ll see what happens if the takeover goes through.

[mitchja]

Further updates today from both Nationwide and VM (March 21st).

Both the Nationwide and VM credit card apps show a link to these updates.


From Nationwide

Published on: 21 March 2024
A message from our Chairman

I wrote to you earlier this month to say that the Board of Nationwide was considering making an offer to buy Virgin Money. I said I would provide you with more information once a decision had been made.

I am now pleased to confirm 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.

The Board believes the acquisition offers compelling benefits for Nationwide’s current and future members. Accordingly, it has made a binding offer that Virgin Money’s directors intend to recommend be accepted by their shareholders. You can find full details of the offer and answers to key questions you may have.

This acquisition will strengthen Nationwide financially and presents an opportunity to accelerate our strategy. It delivers greater value for our members and broadens the range of services we offer to include those that many members have requested.

Acquiring the Virgin Money business will create a financially stronger building society with a larger customer and deposit base. We expect to use this financial strength to support the continued provision of savings and lending rates for members in the future that are, on average, better than across the market in general.

Nationwide will acquire a strong personal lending business and credit card range.

For a while, we have considered how to extend the benefit of our mutual model to include business banking. This acquisition will bring the established business banking services of Virgin Money within the Nationwide Group. In the long term, we would make these, and accounts for clubs and charities, available to our members.

As a result of the acquisition, we will increase the size of the Group’s branch network. We will also extend our Branch Promise by two years, meaning that everywhere we have a Nationwide branch, we promise to still be there until at least the start of 2028.

The Board remains wholly committed to remaining a building society and a modern mutual that meets more of its customers’ and members’ banking needs. All customers will become part of a combined group with a clear focus on providing simply brilliant service to its customers.

Last year Nationwide was able to make its first Fairer Share Payment to eligible members. We expect that a financially stronger combined Group would make future payments more likely, but these would only be to eligible Nationwide members and not to Virgin Money customers.

The integration of the two businesses would be undertaken carefully over several years, and it will be designed to avoid disrupting services or customers.

The Board believes that the benefits that this acquisition will bring to our current and future members are substantial and could not be delivered by Nationwide on its own.

We will keep you updated on progress through our News hub and in our regular newsletter. You can sign up to receive the newsletter, by updating your preferences.

As ever, we will continue to focus on delivering our Purpose: Banking – but fairer, more rewarding and for the good of society.

Thank you for being a member.
Yours sincerely,

From VM:

Important update for our customers
Updated on 21 March 2024

Following the news from earlier this month about the potential acquisition of Virgin Money by Nationwide, we wanted to let you know that both businesses have agreed to the terms of a recommended transaction.

The sale is expected to complete in the fourth quarter this year, and Virgin Money will continue to operate as a separate business for some time after completion. For now, there’s no impact to your Virgin Money products or services (including Clydesdale and Yorkshire Bank), and no changes to FSCS deposit protections. If anything changes in the future, we’ll let you know in advance.

This is an exciting time as we look forward to a future as a strong combined group, with a wider range of products and services for all our customers.

Unfortunately, fraudsters often take advantage of times of change to try and persuade people to share personal or financial information. We’ll never ask you for security details, over the phone or by email, so if someone does – please don’t share this information with them.

We’ll keep our website up to date with the latest news and our teams are as committed as ever to delivering great service to you.

Thank you again for continuing to be a loyal customer.
David Duffy
CEO

[mitchja]

As of today, October 1st 2024 Nationwide has completed its acquisition of Virgin Money.

For now; nothing changes.

A message from our Chairman

I am pleased to confirm that Nationwide has completed its acquisition of Virgin Money.

Nationwide is now stronger and able to deliver even greater value for our members, including through our unique Branch Promise, leading customer satisfaction, and competitive savings and lending rates.
We aim to deliver market-leading standards of customer service as the UK’s second largest provider of mortgages and savings accounts.

Importantly, Nationwide is still a mutual and owned by our members. All of the profits generated by Virgin Money will be retained for the benefit of customers and, for the first time in the UK, a full-service business bank will be part of a large mutual.

The country’s small and medium businesses will be able to choose to bank with a national brand that cares about the services and support it provides for customers and the impact it has on society without having to meet the needs of external shareholders.

I can also confirm that Virgin Money branches are now included in our Branch Promise. This means that everywhere there is a Nationwide or Virgin Money branch, we promise to still be there until at least the start of 2028.
Although you will not be able to use Virgin Money branches for Nationwide transactions now, over time we expect to broaden the range of services we offer. You will benefit from the Virgin Money expertise in personal lending and credit cards, as well as business banking and accounts for clubs and societies.
Customers who have savings with both Nationwide and Virgin Money will continue to benefit from the maximum protection offered by the Financial Services Compensation Scheme on each of their Nationwide and Virgin Money accounts.

As we integrate Nationwide and Virgin Money carefully over time, the impact we have in communities across the UK, and the benefits we offer to members and customers, will only increase.

One in three people in the UK now have a connection to Nationwide – this deal means we can do even more to make their banking fairer, more rewarding, and for the good of society.

Thank you for being a member.

Yours sincerely,

Kevin Parry
Chairman