Portman BS to merge with Nationwide

So do I. Perhaps the new name: "Nationwide Building Society" is intended to reassure us? ;-)

For now perhaps. Let's hope you're right!

Just read the Nationwide press release, they say Portman members will get a vote AND a bonus if the merger goes ahead, but Nationwide members will get nothing - no vote and no bonus! WTF kind of a "merger" is this?

In message , Colin Reddish writes

I dont think it is surprising, in fact I think we will see more smaller societies being gobbled up and or merging to obtain a critical mass. B./Socs are struggling to compete because of their high cost base caused by a branch network. Many dont have a credit rating and therefore can not borrow as cheaply as the big boys and they must rely to a greater extent on their depositors. This take over removes the cost of the whole central management of the Portman and will drive down their cost of funds.

I think this is really a takeover by Nationwide rather a merger. When smaller BS's are "taken over" by larger ones it is normal for only members of the smaller society to receive a bonus and also it is not necessary for the aquiring society members to vote. Subject to legislative approval this can be an excecutive decision by the aquiring society. Fortuitously for the managements the assignment to charity clause applied to Portman account holders for the last several years only applies in the event of conversion to, or takeover by, a PLC. So as in this case both parties are BS's (some may say the initials BS means something different from normal in this case :-) ) most Portman account holders will receive a bonus. Otherwise I would expect that without the incentive of a bonus for Portman account holders they would struggle to get the required 75% majority.

"Colin Reddish" wrote

There was a "merger" of two life offices recently, whereby they kept the Company Number of one and the Name of the other!

Is that a "merger", or a "takeover" by the one whose Company Number was kept, or a "takeover" by the one whose Name was kept? ;-)

When Lloyds Bank and the TSB merged, the remaining organisation was the TSB, but their members received a special dividend as a result of the merger, and Lloyds shares were converted into shares of TSB, now named Lloyds TSB. Effectively Lloyds reversed into the TSB.

The Q&A on the Nationwide site says "A bonus was paid to Staffordshire Building Society and Lambeth Building Society members when they merged with Portman", so they'll get another bonus! So I guess the thing to do is open a load of accounts with small building societies and put 100 in each.

Where does the money come from to pay these bonuses? It's not like a PLC conversion where the shares are up for sale. So who pays?

After the recent 0.25% increase in the base rate, how many of the Nationwide savings accounts received the full 0.25% increase? Not many. And how long did it take them to apply the increase? Several weeks. As always, the long-suffering investors (and borrowers) pay.

... and knocked it over. It must have taken them at least two years to come even close to integrating their computer systems. Strange that RBS didn't to seem to have any problem "swallowing" NatWest. But then snakes can easily digest things several times their own size. :-)

I recently ditched NatWest in favour of Nationwide. 4.25% interest on the current account as opposed to 0.1%. Superior online banking, including full integration with Microsoft Money. Better exchange rate with the debit card on overseas transactions. SO don't knock Nationwide too much. There are many worse places for your money!

Are Natwest and RBS systems integrated yet? It appears to me like they are running as two separate organisations that happen to offer the same products.

BS's build up "reserves" and it is a proportion of these (70% in the case of Portman IIRC) that are used to pay the bonuses. So I guess the members have contributed to the build-up of the reserves so they are efectively getting a proportion of this back. But not necessarily in proportion to their contributions. Portman happen to be one of a few BS's which I retained a

Am I right in thinking that is only on the first 3k of your balance ?

And they raised their base mortgage rate by 0.35%. IIRC for the last few years every single change in the BOE rate has resulted in Nationwide increasing the margin between their BMR and the BOE base rate.

So have the Portman built up more reserves per member than the Nationwide? If not that means the Portman won't be contributing its fair share to the combined reserves of the merged society, since it is paying this bonus. IOW Nationwide members are subsidising the bonus payment.

Something like that.

And that's another thing. A couple of months ago Nationwide were spending money advertising for members to vote. When I got my voting booklet the only thing of any significance to vote on was the board members, and there were 5 candidates for 5 positions! Yeah - really worth voting!

Now the board is going to change completely with new members, and we don't get a vote!

I think it's £3k, but the Sunday Times thinks it's £2500 ;-)