Nationwide is mulling its first bank purchase

 
Tim Wallace
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THE NATIONWIDE building society is considering buying the 316 RBS branches which are up for sale, joining a small field of potential investors.

The building society has expanded by merging with other mutuals over the years – but it is not thought that a building society has ever before acquired a bank, or such a large number of bank customers.

The 316 RBS branches with 1.8m customers must be sold in the wake of the bank’s 2008 bailout. The divestment was mandated by the European Commission as part of its approval of the deal under state aid rules.

RBS had hoped to sell the branches to Santander for £1.65bn. But after years of negotiation the deal collapsed when the buyer pulled out of the deal.

Nationwide declined to comment on rumours it may bid for the branches.

But a source close to the building society told City A.M.: “Nationwide is continuing to look at the branches with interest.”

They come with 1.8m retail customers and almost 250,000 small business accounts, which would add to the Nationwide’s existing 15m members and the group’s 800 branches.

If the building society did buy the chunk of RBS, it is believed that the customers would become members of Nationwide – a change in account status not thought to have happened before.

NBNK and JC Flowers are both believed to have approached RBS over buying the branches, while RBS is understood to have approached Virgin Money – which bought Northern Rock – as a possible buyer.

High street giants Barclays, Lloyds and HSBC are not allowed to buy the branches under competition rules.