Five questions posed to Nationwide executives by its members at its online-only annual general meeting

Nationwide Building Society’s annual general meeting today saw Chief Executive Debbie Crosbie and 10 of the Society’s directors stand for re-election.

Its Annual General Meeting was held online; members did not have the option to attend in person.

Britain’s largest mutual fund said holding its AGM online enabled ten times more members to attend than if the AGM were held in person.

The Virgin Money acquisition, Nationwide’s branch promise to run until 2028, Fairer Share savings and payment products were at the forefront of members’ questions to the board.

This is Money reveals five of the most pressing questions Nationwide members have.

1. Why are savings books being modernised? Has there been pressure from members to do so?

Last week, This is Money revealed that Nationwide will be phasing out savings books from February 2025 and replacing them with a “modernised” savings wallet.

One Nationwide branch staff member told us they were concerned there would be “mountains of complaints” if Nationwide removed passbooks.

Nationwide said 2 percent of its 16 million customer base currently uses passbooks.

Debbie Crosbie, chief executive of Nationwide Building Society, said: ‘We know how important passbooks are to our members, which is why we are modernising them rather than retiring them.

‘The technology used in printers is very old and often breaks down, in fact it is one of the main reasons why queues form in branches.

“So technological advances have really driven the need to modernize the books.”

“We hope that the new savings portfolios will improve the experience of our members in the branch.”

2. I have been a member for almost 40 years but I have not yet received the loyalty bonus. What does the company consider loyalty?

Nationwide launched its second Fairer Share payment in May this year, paying out £385m to 3.85m Nationwide members.

But not all Nationwide members were eligible to receive the payment: only about 20 percent of Nationwide members received it.

At a basic level, to receive the £100 payment, members needed to have a Nationwide current account, as well as one of the following:

• At least £100 in a Nationwide savings account or ISA
• At least £100 remaining on a Nationwide mortgage by 31 March 2024

Crosbie said: “The Fairer Share payment is designed to recognise customers who have their primary banking services with us. We believe this is the best way to build a long-term relationship with our members.

‘We are absolutely grateful for your loyalty, which is why we offer our members an exclusive bonus to reward their loyalty.

‘A really important part of our Fairer Share package was our exclusive members-only bonus, which pays 5.5 per cent interest for 18 months.

‘The interest generated by this, amounting to £198, exceeds the £100 Fairer Share payment.

‘In addition to this, we have also offered a £200 switching bonus to our saver-only members for opening a current account.’

Kevin Parry, Nationwide’s chairman, added: “The importance of current accounts to Nationwide cannot be underestimated. However, running current accounts is an expensive business.”

Nationwide confirmed that Virgin Money customers will not be eligible for any Fairer Share payments next year if the takeover goes ahead.

Crosbie said: “Virgin Money customers will not automatically become Nationwide members. The Fairer Share payment is for Nationwide members only.

“We intend to offer the Fair Share again next year, provided it makes financial sense.”

3. How will the Virgin Money acquisition work with the branch promise? When there is a Nationwide branch and a Virgin Money branch in close proximity, will one or the other close?

Nationwide has a Branch Promise in place until 2028, meaning that wherever it has a branch, it will remain open until at least 2028.

The mutual, which is in the process of acquiring Virgin Money, received questions from members about what this would mean for Virgin Money branches as well as Nationwide branches.

Crosbie said: ‘We have extended our branch promise not just to Nationwide branches but also to Virgin Money branches, even if they are next to each other.

“Virgin Money branches will retain the Virgin Money brand for the next few years. We will review the branch promise after 2028.”

Chris Rhodes, chief financial officer, said: “Our plan is to rebrand Virgin Money branches within four to six years, so I don’t think we will be rebranding any Virgin Money branches before then. They will remain separate for some time.”

Nationwide also confirmed that it has no plans to open any new Nationwide branches at this time.

4. Nationwide has all savers’ contact details. Why force them to sign up to ‘Savings Tracker’ when you can tell them about deals yourself?

Nationwide launched its Savings Clock a few years ago. It is an email that informs members about savings rate movements to keep them informed of any changes. Savers must opt-in to receive the email communication.

Under the FCA’s Consumer Levy, banks were told to do more to pass on interest rates to savers and make it easier for savers to find better savings deals.

Crosbie said: ‘Our savings monitoring email is not categorised as a service message, the regulator considers it marketing material.

“We cannot send information about new products under current regulations, so savers have to register and opt in to receive the communication. Unfortunately, the regulations consider this to be marketing.”

5. Will Nationwide have to make a “golden handshake” payment to Virgin Money shareholders?

In March, Nationwide offered to buy Virgin Money for £2.9bn. At the time, the offer price represented a 38 per cent premium to Virgin Money’s closing share price on 6 March 2024.

Rhodes said: ‘We are paying £2.9 billion to Virgin Money shareholders to acquire Virgin Money.

“The price we are paying is higher than the price at which its shares were trading. So yes, there was a premium, but we are buying Virgin Money at a discount to its book value.

We believe the acquisition will benefit members with a 17 percent return on their initial investment.