Nationwide boss Debbie Crosbie: I will NOT be shutting down your branches

Debbie Crosbie has many firsts. She is about to celebrate her first birthday as the first female CEO of Nationwide, the UK’s largest construction company.

And she is the first person to lead three major UK financial institutions – having led TSB and Clydesdale earlier in her career.

While in the Clydesdale she was the first woman to sign a Scottish bank note, much to the delight of her then teenage daughter.

“Signing banknotes was the first thing that ever impressed her and possibly the last,” she says with a smile.

Her role with the Nationwide has made her the de facto standard bearer for mutual societies, where common members own the company, not City shareholders.

Despite having spent most of her career in the commercial sector, she is a reciprocity evangelist, which she describes as “the secret sauce I’ve been looking for.”

She claims Nationwide’s mutual status allows her to keep branches open while her rivals are shuttering hundreds of high street stores.

To underline the power of reciprocity, she just unveiled a massive £340 million in cash where members with the ‘deepest relationship’ will receive £100.

To be eligible, members must have either a qualifying checking account and savings account or a qualifying checking account and mortgage. “We literally give people money,” she says.

As for affiliates, she says Nationwide, which currently has 606 outlets, will have its name above more facades than any other financial institution by the end of the year.

“We will probably be the largest branch network by brand in the coming months because the others have closed so many.”

But isn’t it inevitable that branches will have to close because many customers do all their banking online? “Keeping those branches open is very expensive,” she says. “If it was head over heels, we’d shut them down.”

She admits that only a small proportion of customers are regular users of branches, but says these outlets are still essential.

‘It is a broad target group that likes branches. Some people just like to chat. As a mutual insurer, I’m thrilled that we’re providing a service that’s probably not banking, frankly.

“But most people want the confidence that if something goes wrong or they have a complex decision, someone will help them.”

So how many branches has she closed since she took over? Fewer than 20, she says, adding that all closures were due to specific issues with landlords or properties, or when two branches are within a few feet of each other.

“We will never leave a town or city and there is no closure program,” she says.

When she took the job, she made an “affiliate pledge” to maintain a presence in all the towns and cities where it is currently located until at least 2024.

But hold on. Some branches are not open every day, so isn’t that a reduction in service?

“We close some stores a few days a week because it’s so quiet,” she says. ‘It’s better to be there three days a week than not at all.’

Nationwide’s mutual status, she argues, has also enabled it to support clients struggling with the cost-of-living crisis, including temporarily waiving interest on overdrafts for 38,000 members.

“That would be a very difficult decision in the PLC world,” she says. ‘It was a real giveaway and it cost quite a lot of money.’

When it comes to mutual values, their CEOs’ compensation packages are under fire.

Crosbie is paid millions of pounds less each year than the bosses of Lloyds, Barclays and NatWest. Still, she is well rewarded with a salary of over £1 million. She could receive as much as £3.4 million a year if she meets all of her performance goals, which is a lot by all accounts.

She insists that Nationwide should take a balanced approach to pay. Her argument is that people will make a sacrifice in exchange for the satisfaction of working for a mutual insurer, but they wouldn’t accept bottom pay.

“I want people with heart and soul who are committed to reciprocity, but also the most talented people,” she says.

Another criticism Nationwide and others have raised is that it has continued to pay stingy returns on savings even as interest rates have risen. Her defense is that it has “charged more on savings rates” than any bank, claiming that Nationwide’s interest rates average 65 percent higher than competitors.

She also just launched a “Fairer Share” bond paying 4.75 percent, open to all members. She admits that profits, which rose from £1.6bn to £2.2bn, benefited from rising interest rates, which rose from £1.6bn to £2.2bn, saying: ‘ I want to offer as many member benefits as possible.

‘But first and foremost I have to make sure that society is sustainable. I never want to be in a situation where I have paid benefits and then think ‘oops’.’ Nationwide was founded in 1884 as part of a movement to help ordinary working people buy their own homes. These days it might seem a bit old fashioned in an age of super fast tech challenger banks.

Crosbie says there will be “subtle rebranding,” but that reciprocity has never been more important. “We’re talking about being a beacon for mutual good,” she says. “At this point, people are fed up with the whole profiteering thing. I really hope we can make people understand that there are other ways to do business.’

Mutuals in the past, including the Co-op Bank, lost their way because they didn’t focus on commercial realities, but Crosbie is determined that won’t happen under her watch.

“I want to put that sharpness, sharpness and ambition that you have in plc land into a mutual context,” she says. “Some people feel those things are incompatible with the mutual ethos, but I think they’re indispensable.”

Her first year at Nationwide took place against a very difficult economic backdrop. Inflation has risen, interest rates are rising, house prices have cooled, and soon after she moved into her new office, there was the turmoil surrounding Liz Truss’s short-lived premiership. Added to that was the collapse of a series of US banks and the bailout of Credit Suisse. She states that ‘probably the worst [the US banking meltdown] is over’ and points out that financial regulation in the UK is stricter.

A review of the £85,000 guarantee on savings if a bank or building society goes bankrupt would be a good idea, she says.

“It has always been at that level. It’s about perception and trust. With internet banking, money can be moved much faster and easier. Once trust in the digital age disappears, it’s almost impossible to get it back.’

Although house prices have fallen, according to the Nationwide Index, they have now stabilized, she says.

“Prices are still higher than in 2019,” she says. “Personally, I don’t see them falling off a cliff.”

After rising to the top for more than three decades, starting in a time of male domination, Crosbie is now one of many female bosses of financial institutions – including Alison Rose at NatWest, Anne Boden, the founder of Starling, and international titans Ana Botin at Santander and Jane Fraser at Citigroup.

“You get so used to being the only woman. But my 20-year-old daughter lives in a completely different world. People are much more concerned with diversity in general these days.

“I think – and this is a complete generalization – that women take the issues very seriously, but they don’t take themselves very seriously,” she adds with a laugh.