Nationwide has completed its takeover of Virgin Money in major bank tie-up (Image: PA)
Martin Lewis’ Money Saving Expert website has issued a warning to customers regarding the Nationwide takeover of Virgin Money alert to customers. The £2.9 billion acquisition by Nationwide has brought together two of the UK’s largest banking groups.
The deal will create a combined group boasting around 24.5 million customers, over 25,000 staff, and nearly 700 branches. Money Saving Expert has provided a rundown for Virgin Money customers, assuring them that there will be minimal immediate changes.
MSE stated: “There are NO changes for new or existing Nationwide or Virgin Money customers for now. This means you can continue to use or sign up for products and services from both firms as normal. You can also contact Nationwide’s customer services and Virgin Money’s customer services with any queries or complaints as usual.”
“Virgin Money customers may eventually be moved to Nationwide. This won’t happen for at least a year, and we don’t yet know which customers will be transferred or what the process will involve. All Nationwide has said is that it will “consider options” for moving customers across “over the medium to long term”. We’ve asked both providers for more details and will update this story when we know more.”
In a financial shake-up set to redefine UK banking, the merger of these two giant lenders is expected to unfold over the next few years, ultimately leading to the familiar Virgin Money brand vanishing from our high streets. This move won’t happen overnight, though.
Nationwide and Virgin Money will remain as distinct presences for approximately four to six years before Nationwide completes the full integration, at which point Virgin Money customers will transition across. This significant change follows last week’s court approval and earlier shareholder agreement, with over 90% of Virgin Money shareholders endorsing the merger.
Regarding customer savings, MSE has assured account holders: “Your savings remain protected as before. The UK’s Financial Services Compensation Scheme (FSCS) protects up to £85,000 that you save per UK-regulated financial firm (not per account). If you have savings with both Nationwide and Virgin Money, you’ll continue to have the maximum protection with both firms (up to a combined total of £170,000) as they’re continuing to operate separately for now.”
Nationwide, operating as a building society, asserted it did not need to request member approval to push through with this acquisition, prompting some backlash and the formation of a small-scale movement among members advocating for a vote on the matter.
Tuesday was the day Virgin Money exited the London stock market, marking the end of its public trading journey, subsequent to the private takeovera chapter close for the bank launched by famed tycoon Sir Richard Branson in 1995.
Sir Richard’s Virgin Group was poised to rake in over £400 million from the sale due to his substantial 14.5% holding in the bank. Debbie Crosbie, Chief Executive of Nationwide, enthused: “Nationwide is now a stronger mutual and able to deliver even greater value through our unique branch promise, leading customer satisfaction, and competitive savings and lending rates.”
“All Virgin Money profits 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 and modern mutual.”
A mutual, in this context, refers to Nationwide being owned by its members as opposed to the typical shareholder framework that governs most UK banks.