Concern: Lib Dem peer Baroness Bowles
Nationwide has been accused of using ‘sneaky’ tactics to prevent its members from taking over rival lender Virgin Money for a £2.9 billion deal.
The building society is denying its 16 million members a say in the deal that would create Britain’s second-largest savings and loan group.
Campaigners accuse Nationwide of ‘relying on a technicality’ in the Building Societies Act to block a vote.
A clause in the law stipulates that a vote must be taken if the interest on residential mortgages is less than half of the total income of the lender being purchased.
Virgin Money’s home loan revenue was £1.5bn last year – down from 40 per cent, suggesting a vote is needed, campaigners claim.
But Nationwide insists the 50 percent threshold is taken when income from financial contracts called swaps is included.
Lib Dem peer Baroness Bowles, who sits on the board of the London Stock Exchange, said: ‘It appears Nationwide is being somewhat sneaky in including swap income.’ A spokesperson for Nationwide said the campaigners’ calculations were ‘wrong, misleading and ill-informed’.
“Any serious and accurate assessment of the test set out in the law must take into account all relevant income, including from liquidity and hedging associated with mortgage activities,” he added.