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- Nationwide already facing criticism over Virgin Money deal
Nationwide has been criticized for banning members from attending next month’s annual general meeting in person.
The mutual, founded in 1884, is already facing criticism for not giving its 16 million owners a voice in its £2.9bn takeover of rival lender Virgin Money.
Activists plan to voice their opposition to the deal – the biggest in the banking sector since the financial crisis – by voting against Nationwide’s entire board, which is up for re-election at the meeting.
Banned: Nationwide has been criticized for banning members from attending next month’s annual general meeting in person.
This dissent comes against the backdrop of concerns about the potential impact on Virgin Money and Nationwide if a Labor government imposes a new tax on banks.
Most large companies have adopted a “hybrid” approach to their general meetings, using technology to allow shareholders to attend meetings virtually while giving them the right to attend in person to hold their company to account.
But Britain’s largest building society has taken the unusual step of once again holding its meeting exclusively online.
The move surprised some members, who feel they should be able to make their voices heard in person.
John Dawson, a 70-year-old retired baker from Preston, had planned to attend Nationwide’s Annual General Meeting to express his concerns about the deal with Virgin Money.
But when her voting package arrived in the mail, she discovered the meeting was online-only.
“So I sent it back and voted against all the resolutions” in protest, he told The Mail on Sunday.
Virgin Money shareholders approved the purchase, which will create Britain’s second largest savings and loan group after Lloyds.
The deal still awaits regulatory approval.
However, the alliance could be at risk if a new bank levy is introduced after the general election which could raise up to £55bn over the next five years.
The Mail on Sunday recently reported that there are growing calls from all political quarters for commercial banks to stop receiving interest on more than £700 billion in deposits they are forced to hold at the Bank of England.
Banks and building societies have enjoyed huge windfalls on these deposits in recent years as interest rates soared to 5.25 per cent.
Rachel Reeves, who is expected to be the next Chancellor of the Exchequer after voters go to the polls in the July 4 general election, has said the Labor Party has “no plans” to scrap interest payments to banks but, significantly, has not ruled it out.
Analysts at investment bank Barclays believe Virgin Money would be hardest hit if interest rules were changed, with profits falling by up to 60 per cent.
At the national level it would be the next most exposed country, he added.
Campaigners have gathered more than 5,000 signatures on a petition demanding Nationwide members be able to vote on the Virgin Money deal.
They say the lender’s refusal has set “a dangerous precedent” by turning the mutual “in practice into an autocracy instead of the democracy it is supposed to be.”
“Voting against all resolutions… is the only effective method of protest left open to Nationwide members who feel treated with contempt by a mutual that is supposed to adhere to democratic principles,” said the leader of the campaign, Mikael Armstrong.
Swindon-based Nationwide struck a £2.9bn deal to buy Virgin Money in March.
Deal: Swindon-based Nationwide agreed £2.9bn deal to buy Virgin Money in March
Nationwide is the latest company to try to stop owners attending annual general meetings in person.
In a letter to members ahead of the AGM, Nationwide said that “following last year’s successful introduction” of the digital-only event, it wanted to give all members “the opportunity to participate from their own homes”.
“That includes being able to vote and ask questions,” he added.
The society told The Mail on Sunday that attendance at the AGM in person had declined rapidly over the past year and only 32 members turned up in 2022.
Only five complaints have been received about the online-only format in the last two years, he added.
But other companies have been criticized for the way they conduct their general meetings.
Marks & Spencer chairman Archie Norman was forced into an embarrassing retreat last year after the retailer was accused of being “arrogant” and setting “an appalling precedent by attempting to make its annual meeting exclusively online” .
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