Combined group set to become the UK's second largest in terms of market share for mortgages and savings
Nationwide Building Society is set to acquire Virgin Money in a deal valued at £2.9 billion, positioning itself as a stronger competitor to the UK’s leading banks.
The lenders have preliminarily agreed on the essential terms of a transaction that would establish a new competitor boasting £366.3 billion in total assets, with total lending and advances of around £283.5 billion – making it the country’s second largest group in terms of market share for mortgages and savings.
While the agreement has not been officially concluded, the proposed arrangement suggests that both brands will operate independently.
“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,” said Kevin Parry, chairman at Nationwide Building Society, in a statement released on Thursday.
“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.”
Just five years ago, Clydesdale and Yorkshire Banking Group initiated a £1.7 billion acquisition of Virgin Money.
Already the UK’s largest building society, Nationwide said the “combined group would deliver the benefits of fairer banking and mutual ownership to more people in the UK.”
“Nationwide will remain a building society,” Parry said. “It remains wholly committed to being a modern mutual that can meet all its members’ banking needs.”
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