Nationwide eyes mutual competitors for 'tasty morsels'

Nationwide Building Society is predicting a glut of mergers in the sector as the weaker players seek safety in the arms of a larger parent.

Unveiling record profits of £539m for the year, the chief executive, Philip Williamson, invited the small building societies to make him an offer.

"I know all the chief executives and I have said to them, 'if you get into trouble give me a call'," he said. "The phone isn't ringing yet," he added.

Nationwide is not planning any aggressive moves but it believes deals are inevitable before long.

There are 63 building societies and the assets of the other 62 are roughly equal to those of Nationwide, which is a giant in an industry of midgets.

"My gut feeling is that there will be further consolidation," Mr Williamson said. "But most societies are too small to be a particularly tasty morsel to a plc. It wouldn't be worth their effort."

Nationwide's profits rose 15 per cent despite a fall in its share of the mortgage market. Its share of new mortgage business stands at 6.7 per cent, compared to a traditional 9 per cent.

The fall was a result of Nationwide backing away from aggressive lending, fearing the heat of the housing market was leading some rivals to offer reckless deals to borrowers who might struggle to keep up with repayments.

Nationwide claims to have almost no bad debts. Of 1.2 million mortgage customers, only 69 are in arrears by three months or more.

The society, which is the fourth-biggest lender, is poised to start competing fiercely for new business once again and predicts a honeymoon period for mortgage borrowers.

Nationwide, the product of more than 100 mergers since it was formed in 1848, is now the second-biggest player in the savings market. Savings deposits grew by 23 per cent in the year to £8.3bn.

Nationwide has total assets of £120bn, making it easily the world's largest building society. It claims to have saved customers £690m in the past 12 months from the lower fees and better interest rates it is able to offer because it does not have shareholders to satisfy.

Nationwide has not faced any attempt to convert it into a bank for many years - a result, it claims, of having won the argument in favour of mutuality. It is attracting 3,000 new members a day.

The society is predicting a rise in house prices of between 3 and 6 per cent in the coming year, calming fears of a crash in the market.

Mr Williamson said he was sorry to see Standard Life, the only other remaining large mutual in the financial services sector, decide to convert to a plc. And he offered rare words of praise for Halifax, normally Nationwide's fiercest rival. He said: "Banks have started to learn some lessons. They realise that customers are important. HBOS is doing well - good on them. The good thing about us being big is that we are able to give the banks a run for their money."

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
scotland decidesIs a huge gamble on oil keeping First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
PROMOTED VIDEO
Arts and Entertainment
Lionel Messi in action for Barcelona
filmSo what makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Sport
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week