Concern: Baroness Bowles, fellow Liberal Democrat
Nationwide has been accused of using “sneaky” tactics to avoid putting its £2.9bn takeover of rival lender Virgin Money to a vote of its members.
The building society is denying its 16 million members a say in the deal that would create Britain’s second-largest savings and loan group.
Campaigners accuse Nationwide of “relying on a technicality” in the Building Societies Act to block a vote.
One provision of the law states that a vote is required if the interest on residential mortgages is less than half of the lender’s total income being purchased.
Virgin Money’s home lending income last year was £1.5bn, down less than 40 per cent, suggesting a vote is needed, campaigners say.
But Nationwide insists the 50 per cent hurdle is overcome if income from financial contracts called swaps is included.
Baroness Bowles, a fellow Liberal Democrat and London Stock Exchange board member, said: “It appears Nationwide is being somewhat clever by including swap income.” A Nationwide spokesperson said the campaigners’ calculations were “erroneous, misleading and misinformed”.
“Any serious and precise evaluation of the test established in the Law must take into account all relevant income, including that from liquidity and coverage associated with mortgage activity,” he added.
