The deal is expected to see the creation of a heavy weight mortgage and savings brand which would rival the big banks.
Nationwide is, according to UK Finance data, the third biggest lender in the UK. It ranks behind Lloyds Banking Group (which includes Halifax) and NatWest with £37.8bn of gross lending on its books in 2022. Virgin Money, meanwhile, was ranked as the seventh biggest lender with £10.5bn of gross lending in 2022.
Graham Cox, director at SEMH Self-Employed Mortgages, speaking via the Newspage agency, said: “Nationwide is firing a shot across the bows of Halifax with this acquisition, threatening their status as the UK’s number one mortgage lender by market share.
“Nationwide’s reach will also increase banking competition on the high street, which can only be a good thing for consumers, given how complacent some of the established banks are.”
Whilst Nationwide has said it won’t ditch the Virgin brand, initially, it would eventually be phased out over a six-year period once the takeover has completed.
David Hollingworth, associate director at L&C Mortgages said: “Borrowers have nothing to worry about and their mortgage will continue as normal.
“In fact, both brands are set to continue for some time to come, so the market should continue to benefit from differentiated ranges in the near term.”
He added: “Nationwide underlines its position as a superpower of the mutual sector in acquiring a substantial bank player in the mortgage market.
“The combination will create another Goliath furthering Nationwide’s ability to directly take on the big banking groups.”
He went on to say: “Virgin Money has been very competitive in the mortgage market and shown itself more than capable of going toe to toe with the major high street banks. At times it has shown an ability to bring a different way of thinking to the market and sought to innovate in its product options.
“It also has a solid heritage in being able to take a more flexible approach for the right customers to help borrowers that may be a little outside the standard high street offerings.
“That expertise will hopefully appeal to Nationwide rather than risk the gradual demise of the more individual approach that can be available through Virgin’s Clydesdale mortgage brand in particular.”
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