Windfall alert: Marriages in high society

After the Nationwide-Portman merger, more may follow
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The Independent Online

Who's next? That question is buzzing around Britain's building societies after last week's announcement that Nationwide is to buy Portman, its smaller rival, and create a "mega-mutual" capable of taking on high-street banks.

Portman is currently the third-biggest building society, behind second-placed Britannia. As its savers and borrowers celebrated news of a merger windfall of at least £200 - and a lot more in some cases - industry tongues began to wag on the next likely tie-up.

Their focus is the north of England. Britannia, based in Staffordshire, already shares branches with Yorkshire building society; and it has been busy on the acquisition trail recently, swallowing the branch network and savings accounts of the former bank Bristol & West.

However, while both Britannia and Yorkshire said their positions were always under review, they stressed that no deal was on the cards. "We have made it clear we are happy to consider mergers but only if [they are] in the interest of our members," said a spokesman for Britannia.

Yorkshire itself came within hours of merging with Portman late last year, but the deal fell apart.

Last week's proposal will have to be put to the vote, but since Portman's board has recommended that its members take up the offer, major objections from members are unlikely.

Philip Williamson, Nationwide's chief executive, has said that post-merger economies of scale will bring savings that can be passed on to customers.

Many in the industry correctly predicted that 2006 would be a busy 12 months for consolidation among Britain's building societies. So far, the mergers have been between Leeds and Mercantile (January); Portman and Lambeth (March); and Newcastle and Universal (May).

All will deliver windfalls ranging from £100 to £2,500.

Precise details of the Portman payouts won't emerge until early next year ahead of the vote at the 2007 AGM, but the average sum is expected to be between £400 and £500 per person.

To qualify for a windfall, savers must have had a minimum of £100 in a savings account on 11 September this year; borrowers will need to have owed £100 or more. Nationwide members will not get payouts.

As for the branch network, it is expected there will be 880 sites in the UK.

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