Nationwide ad banned over ‘not closing branches’ claim

A TV advert for Nationwide that claimed the building society was not closing branches has been banned by the UK advertising watchdog.

The ad featured actor Dominic West as an arrogant bank boss planning branch closures. A voice-over stated: “Unlike the big banks we’re not closing our branches” and on-screen text referred to Lloyds, Bank of Scotland/Halifax, Natwest, Barclays, Santander and HSBC.

Similar claims were made in radio and press ads as part of the campaign.

Among the 282 complainants was Nationwide’s rival Santander, which argued that Nationwide had recently closed or reduced opening hours at a number of branches.

Responding to inquiries by the Advertising Standards Authority (ASA), Nationwide said that its under its 2023 Branch Promise the building society would not close any of its branches until at least 2026.

However, the regulator said that the timeframe of its claim was not made clear enough in the ads. It added that consumers were likely understand from the ads that Nationwide would not be closing branches in the long-term future and that it had not recently closed branches.

As a result, the ASA ruled that the ads were misleading and must not appear again in their current form.

Nationwide agrees acquisition of Virgin Money

Nationwide Building Society has agreed terms of a possible acquisition of Virgin Money UK plc.

Under the preliminary agreement Nationwide will pay 220p in cash per Virgin Money share, representing a premium of 38% to Virgin Money’s share price on Wednesday.

The £2.9bn deal would see the Virgin Money brand retained for around six years.

Nationwide is UK’s biggest building society with more than 17 million customers, while Virgin Money is the UK’s sixth largest retail bank with around 6.6 million customers.

The combination of the two businesses would create the second biggest provider of mortgages and savings in the UK.

Virgin Money is a FTSE 250 company, dual-listed on the London Stock Exchange (LON:VMUK) and the Australian Securities Exchange (ASX:VUK).

Following the acquisition Nationwide will remain a building society, owned by its mutual members.

Nationwide has the largest single-brand branch network in the UK. It said it intends to retain a branch everywhere where the combined group is present, until at least the start of 2026.

Last month, Barclays agreed a deal to acquire Tesco’s retail banking business for £600m and further consolidation in the sector is possible as lenders look to retain market share.

“With the outlook for the UK economy stabilising, we wouldn’t be surprised to see more deals like this announced,” RBC Capital Markets analyst Benjamin Toms told Reuters.

“UK bank valuations are relatively cheap for the sustainable returns they offer.”

Nationwide to give customers £100 reward payment

Nationwide will pay out £340m to customers after reporting a 40% increase in annual profit.

The building society said that eligible members who hold both a qualifying current account and a qualifying savings or mortgage product will receive a £100 cash reward in June.

“We are able to do this because of our financial strength and the fact we’re a building society, not a bank, so our profit is used for our members’ benefit,” said Nationwide chief executive Debbie Crosbie.

Similar distributions are planned to be made annually, subject to the financial strength of the business each year.

Alongside the £100 Fairer Share Payment, Nationwide is also offering a new Fairer Share Bond with an interest rate of 4.75%. Available to its 16 million members, the two-year bond can be opened in branch or via the building society’s banking app or online banking facility.

Nationwide recorded pre-tax profit of £2.2bn in the year to 4 April 2023, up from £1.6bn in the previous 12 months.

In its strongest year to date, Nationwide said that it returned a record of more than £1bn to members through better rates and incentives.