Merger creates UK’s second-biggest mortgage lender

12 September 2006

The Nationwide and Portman building societies have announced that they’re going to merge – creating the UK’s second-largest mortgage lender. The merged group – which will take the Nationwide name – will have more than 800 branches across the UK and more than 13 million members.

Nationwide is currently the UK’s biggest building society, while Portman is the third biggest. It’s understood that the deal will be completed by September 2007.

The merger will mean windfalls for many of the Portman’s 1.8 million members of at least £200. To qualify, Portman mortgage holders will have had to have held a minimum balance of £100 on 11 September 2006. Portman members with savings will have had to have held at least £100 in their account on that date. Members with both savings and a mortgage with the Portman will be eligible for two merger bonuses – but Nationwide members won’t receive a bonus.

Today the societies said the new body – which will have assets of more than £150 billion – would continue as a mutual society, that’s owned and run for the benefit of its members.

Nationwide’s chief executive, Philip Williamson, said both firms realised that they needed to be bigger to compete better in a competitive marketplace. He said: “Joining together gives us a lot of synergies, such as being able to borrow at a cheaper rate and some cost savings.”