Nationwide merger will suit all sides
Nationwide’s merger with The Derbyshire Building Society and The Cheshire Building Society, which was confirmed yesterday, will see it stretch its lead at the top of the list of UK mortgage lenders.
The tie-up will hand the building society an extra 95 branches to add to the 900 retail locations it already operates, reinforcing its trend-bucking performance during the downturn.
The Derbyshire, led by chief executive Graham Picken and the Cheshire, led by Karen McCormick – the only female chief executive of a UK building society – will also welcome a deal that puts their members in the hands of a giant which appears to be in good spirits.
Both the Derbyshire and Cheshire posted a fall in profits, to £8.7m and £8.1m respectively, as they were hit by tough conditions in the housing and credit markets and uncertainty created by the collapse of Northern Rock.
In stark contrast, Nationwide, headed by chief executive Graham Beale and chairman Geoffrey Howe, is one of only a handful of financial institutions to have done well out of the credit crunch, as savers looked to deposit funds with larger, more robust organisations.
Nationwide saw a 17 per cent increase in pre-tax profits to £781m in its annual results to 4 April, boosted by its acquisition of the Portman Building Society in August 2007.
That purchase is set to deliver cost and revenue benefits of £90m a year by 2009 to 2010, Nationwide said.
