The Lemon Fool

Nationwide B Soc is using its excess reserves to buy Virgin Money and, in the process, to pay Richard Branson £250 million for the use of the Virgin Brand.

Can anyone explain how this transaction is in the interests of Nationwide's members?

No.

It would certainly appear (from reading of the information in the Sunday Times) Branson's parent company has a wonderfully written protection of the Virgin brand and it's associated usage (or termination around its usage!).

I'm not sure it meaningfully adds to it's branch footprint in a way that couldn't be done organically and I suspect most of the branches acquired will simply be closed as they're within spitting distance of a Nationwide already.

the0ni0nking wrote:No.

It would certainly appear (from reading of the information in the Sunday Times) Branson's parent company has a wonderfully written protection of the Virgin brand and it's associated usage (or termination around its usage!).

I'm not sure it meaningfully adds to it's branch footprint in a way that couldn't be done organically and I suspect most of the branches acquired will simply be closed as they're within spitting distance of a Nationwide already.

The Virgin name has value. So when Alaskan Airlines bought Virgin America they had to pay millions extra for the Virgin brand name even though they did not retain it.

Horrible deal. Partly because of timing - it was right before Covid killed air travel. And partly because of a lack of synergy - Alaskan was an all 737 airline and Virgin was all Airbus.

This makes Nationwide a big bank. A curse?

Lootman wrote:
This makes Nationwide a big bank. A curse?

Is Nationawide a Building Society or a Bank? Is there a difference? Does being militantly mutual make Nationwide different? Perhaps its members are more docile and more easily manipulated than shareholders.

I have a current account with NW which charges for its added services, but is not such a good deal as it was. For several years now I have found its savings products uncompetitive, and I realise now that was probably because it was amassing a war chest to splurge on buying Virgin. Personally I see no value in the Virgin brand name, but it will be interesting to see if their savings interest rates improve.

I guess this means they might have to dump the white pigeon logo and come up with something even worse.
I propose they call the new outfit Pigeon Money

Nimrod103 wrote:

Lootman wrote:
This makes Nationwide a big bank. A curse?

Is Nationawide a Building Society or a Bank? Is there a difference? Does being militantly mutual make Nationwide different? Perhaps its members are more docile and more easily manipulated than shareholders.

I have a current account with NW which charges for its added services, but is not such a good deal as it was. For several years now I have found its savings products uncompetitive, and I realise now that was probably because it was amassing a war chest to splurge on buying Virgin. Personally I see no value in the Virgin brand name, but it will be interesting to see if their savings interest rates improve.

Nationwide's message to members states that it will remain a building society.

TJH

Nationwide is a Building Society. As a mutual, any excess capital belongs to its members and should only be used in their best interests.

The Society could reduce its mortgage rates and/or increase its savings rates. It could offer a loyalty bonus to long-standing members. It could open new branches in areas currently not served by other financial institutions.

At the vey least, it should put the proposed transaction to a members' vote.

Jimbob47 wrote:
The Society could reduce its mortgage rates and/or increase its savings rates. It could offer a loyalty bonus to long-standing members.

It did offer a fair share scheme for long standing members. I got it, all £100 but I know some that didn't. If fact for them it meant moving one of their savings accounts to a competitor and altering how some payments are made.

So now they are less loyal and have reduced savings held with Nationwide but will probably get the next fair share payment.

I have seen mixed comments about the deal. Some brokers saying it's complementary and some shareholders saying its too expensive. I suppose its how Nationwide can make it work.

Gerry557 wrote:

Jimbob47 wrote:
The Society could reduce its mortgage rates and/or increase its savings rates. It could offer a loyalty bonus to long-standing members.

It did offer a fair share scheme for long standing members. I got it, all £100 but I know some that didn't. If fact for them it meant moving one of their savings accounts to a competitor and altering how some payments are made.

So now they are less loyal and have reduced savings held with Nationwide but will probably get the next fair share payment.

I have seen mixed comments about the deal. Some brokers saying it's complementary and some shareholders saying its too expensive. I suppose its how Nationwide can make it work.

The name 'fair share' was a misnomer. At the time of the giveaway I only had a current account, which was not eligible, having recently closed a deposit account. The fairest scheme would be to offer competitive rate on their savings accounts.
I still thing Nationwide management prefer the mutual structure because IMHO members are much more docile than shareholders.

So you vote no to the renumeration box too.

I cannot help thinking this has all the signs of becoming another Equitable Life. A mutual getting out of its depth in an area where it does not have a full understanding of the risks or chooses to ignore danger signs. Heaven help the members!

Nimrod103 wrote:

Gerry557 wrote:
It did offer a fair share scheme for long standing members. I got it, all £100 but I know some that didn't. If fact for them it meant moving one of their savings accounts to a competitor and altering how some payments are made.

So now they are less loyal and have reduced savings held with Nationwide but will probably get the next fair share payment.

I have seen mixed comments about the deal. Some brokers saying it's complementary and some shareholders saying its too expensive. I suppose its how Nationwide can make it work.

The name 'fair share' was a misnomer. At the time of the giveaway I only had a current account, which was not eligible, having recently closed a deposit account. The fairest scheme would be to offer competitive rate on their savings accounts.
I still thing Nationwide management prefer the mutual structure because IMHO members are much more docile than shareholders.

I've had a savings account with them since there was the mad rush for the BS's to go mutual in the 90s.
So much for rewarding loyalty, the £130 could have earned more elsewhere

Nimrod103 wrote:The name 'fair share' was a misnomer. At the time of the giveaway I only had a current account, which was not eligible, having recently closed a deposit account. The fairest scheme would be to offer competitive rate on their savings accounts.

Well, if you want to discuss "fair" we could reboot the discussion over all those demutualisation's. Remember?

DrFfybes wrote:I've had a savings account with them since there was the mad rush for the BS's to go mutual in the 90s.

That went well, didn't it?

There’s an interesting article about the proposed deal by Jill Treanor in today’s S.Times business section.

Gordon51 wrote:There’s an interesting article about the proposed deal by Jill Treanor in today’s S.Times business section.

As its behind a pay wall can you give us a clue

A brief summary Gerry'

Says difficult to gauge N'wide members views as no proper forum & no share price (altho' bind price steady) and a lot depends on Debbie Crosbie's experience in banking. Some commentators feel that not giving members a vote is a mistake. Some analysts suggesting N'wide getting a bargain. N'wide claim they won't rush into integrating the businesses & that the deal means it can offer more value & broader services long term. Article points however that N'wide doesn't currently offer the best savings and mortgage rates to its members.

For customers of both like me this is a good statement.

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.

For now.

I note Halifax, Bank of Scotland, iWeb and Lloyds and I use 3 of them only have the one FSCS deposit protection for the group.

Gordon51 wrote:. Article points however that N'wide doesn't currently offer the best savings and mortgage rates to its members.

That fact flies in the face of what successive top brass have said for years, their better terms result from being a mutual! What utter tosh! I didn't even receive the paltry £100 other members did last year, after 35 years membership.

Ms Crosbie says they have taken the 'best legal advice available' and no member vote is required. What they need to do is not what's legal, but what's right. I don't know how I would vote if I were offered it, but I'm leaning towards a 'no'. Incidentally, where is all this money coming from?

kempiejon wrote:I note Halifax, Bank of Scotland, iWeb and Lloyds and I use 3 of them only have the one FSCS deposit protection for the group.

That is true for the stockbroking services offered by HSDL, but the FSCS protection for the LBG banks is separate:

https://www.iweb-sharedealing.co.uk/ass ... tssafe.pdf

Gordon51 wrote:A brief summary Gerry'

Says difficult to gauge N'wide members views as no proper forum & no share price (altho' bind price steady) and a lot depends on Debbie Crosbie's experience in banking. Some commentators feel that not giving members a vote is a mistake. Some analysts suggesting N'wide getting a bargain. N'wide claim they won't rush into integrating the businesses & that the deal means it can offer more value & broader services long term. Article points however that N'wide doesn't currently offer the best savings and mortgage rates to its members.

Thanks. If it's such a bargain, why are they selling?

You might not get a vote on the deal but you do get a vote on board membership and pay.

I look forward to the better rates