Nationwide announced today that it is to merge with Portman in the biggest ever building society tie-up.
The enlarged society, which will be named Nationwide Building Society, will be the UK's leading mutual organisation with total assets of more than £150 billion.
The merger is expected to become effective by the end of September 2007, subject to approval from Portman members and the Office of Fair Trading, and confirmation by the Financial Services Authority.
In a joint announcement to the Stock Exchange, the building societies said Graham Beale, currently group finance director of Nationwide, will become chief executive of Nationwide on April 1 next year and will subsequently head the merged society.
Philip Williamson, Nationwide's chief executive, said this was "great news for members of both societies".
"As a result of the merger, 13 million people will be members of a bigger and even better society, offering market-leading products and pricing, underpinned by a strong commitment to mutuality," he said.
"We are really looking forward to welcoming customers and employees of Portman to the world's number one building society, which will be the second largest mortgage lender in the UK and will reinforce Nationwide's present position as the second largest provider of retail savings."
Robert Sharpe, chief executive of Portman, said: "If building societies are to continue to compete successfully with the retail banks, they need to enjoy comparable economies of scale."
He said Portman members would receive "a significant merger bonus".
Mr Williamson and Mr Sharpe will continue in their current roles for the time being, Nationwide said.
Qualifying Portman members will receive a merger bonus of £200.
The enlarged society will continue as a mutual society owned and run for the benefit of its members with more than 880 locations across the UK, Nationwide said.
Portman members will have access to current account and credit card products not previously available to them, while Nationwide members will have access to a new range of wealth management and financial planning services.
Mr Williamson, who is to retire ahead of the merger along with Mr Sharpe, said the key benefit for all members would be "financial synergies and cost savings".
"The merger will enable us to compete more effectively," he said.
Although there would be some overlap leading to job cuts, these would be kept at a minimum and could be restricted to natural turnover of staff, he said.Reuse content