Nationwide halts plans to enter the business banking market as it focuses on its existing members' financial priorities

Nationwide Building Society (‘Nationwide’) has today announced that it is stopping plans to enter the UK business banking market as it prioritises supporting its members through the immediate and longer-term financial implications of COVID-19.

The impact of COVID-19, including assumption changes to short and long-term interest rates, has meant that the option of entering the business banking market is no longer commercially viable. As a consequence of its decision, Nationwide will cease activity directly related to its proposed market entry, it will return the £50 million grant funding it was awarded from the Banking Competition Remedies’ Capability and Innovation Fund, as announced in May 2019, and won’t participate in the Incentivised Switching Scheme.

The financial implications of the cancellation will be disclosed within Nationwide’s preliminary full year results for 2019/2020. At this stage, Nationwide estimates the costs of cancellation will be in the region of £70 million in 2020 but running cost and investment savings will make this a net neutral cost over the next 24 months. All employees will be redeployed to other roles within Nationwide.

Today’s announcement does not impact Nationwide’s business savings accounts which will continue to operate as normal.

Nationwide Building Society CEO, Joe Garner, said:“Our priority as a building society must always be our existing members and employees. COVID-19 has changed the medium-term interest rate landscape, meaning the business case for entering the market is no longer viable. Therefore, our absolute focus will be on supporting our members and our employees through the immediate difficult time and future financial implications of the virus.”

Notes to Editor:

In May 2019, Nationwide was awarded a £50 million grant from Banking Competition Remedies’ Capability and Innovation Fund in order to ‘develop a new business current account or ancillary product propositions for SMEs in the UK’. Nationwide will return this grant award and any other sums that may be due to BCR.

In March 2019, Nationwide took a £15 million investment in 10x Future Technologies as part of its plans to build to a new cloud-native platform for its business current account and related products. Nationwide plans to continue to work with 10x Future Technologies in the application of the platform for the Society’s existing and future product ranges.

About Nationwide

Nationwide is the world's largest building society as well as one of the largest savings providers and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers.

Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 18,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

Please note: If you are a customer looking for information on our products and services, please visit the main website.