Nationwide: building society's Virgin Money deal explained - how does news affect banking account customers?

Nationwide Building Society is set to take over its smaller competitor, Virgin Money, after the two parties agreed to a deal worth around £2.9 billion.

Virgin Money shareholders will now vote on Nationwide's 220p-a-share firm offer, which includes a proposed 2p-per-share dividend payout.

The deal was confirmed after the two businesses came to a preliminary agreement earlier this month. Prior to making the formal offer, Nationwide had spent the past two weeks looking through Virgin Money’s books.

The planned takeover will bring together Britain’s fifth and sixth largest retail lenders, creating a combined group with around 24.5 million customers, more than 25,000 staff and nearly 700 branches.

But what does the move mean for those customers, and will there be any sweeping changes in the short-term? Here is everything you need to know.

What does the move mean for me?

The move will spell the end of the Virgin Money brand, with Nationwide planning to rebrand the Virgin Money business as Nationwide within six years, although it will keep the two brands initially.

Nationwide said it will keep a branch in each location where the combined group is present, until at least the start of 2028 – announcing that it has extended its branch promise by another two years.

Nationwide said it does not intend to make any “material changes” to the size of Virgin Money’s 7,300-strong workforce within the first year, but it is assessing the employee needs of the combined group and expects there to be some “limited” impact on back office staff.

“There may be some limited workforce changes to reduce the size of overlapping central functions relating to Virgin Money ceasing to be a standalone publicly listed company,” the groups said.

Nationwide also stressed it will remain a mutual building society if the deal goes ahead and is given the green light by Virgin Money’s shareholders.

Nationwide chief executive Debbie Crosbie said: “This acquisition strengthens Nationwide and means we can offer more value and broader services for our current and future members.

“More people will experience the benefits of mutual ownership and the customer-focused approach of a building society.”