Treasury and Dunfermline Building Society
December 2013 – The Treasury paid £1.5bn to the Nationwide Building Society for the takeover of the Dunfermline Building Society following its collapse. The Treasury and the Financial Services Compensation Scheme are now working together to determine how much of the money still owed to the Treasury can be recovered.
Telegraph Report
Nationwide Building Society to Raise £500m
November 2013 – The Nationwide Building Society has announced that it is now ready to proceed with plans formulated some time ago to issue a new type of shares.
The shares known as core capital deferred shares (CCDS) are to be issued to meet the Prudential Regulation Authority (PRA) need for the society to meet core banking requirements. The PRA has given the Nationwide BS until the end of 2015 to raise its leverage ratio to 3% from the current 2.3%.
There is no indication that the shares will be offered to existing members as was the case with Permanent Interest Bearing Shares (PIBBS) which the new shares will replace. Investors will still only have one vote per investor so accountability will still be lacking.
BBC – Robert Peston Report and Forum
Progressive Building & City of Derry
November 2013 – Another building society is to disappear as arrangements are made for the City of Derry Building Society (previously known as the Londonderry Provident Building Society) to be taken over by its bigger brother the Progressive Building Society. Both of these societies are in Northern Ireland.
Progressive Press Release
City of Derry Website Comment
Mis-sold Credit Card Insurance
August 2013 – The Nationwide (On Your Side?) is one of a number of banks that will take part in a compensation scheme for customers who have been mis-sold insurance.
Over seven million people are due to receive compensation as banks are landed with a compensation bill of £1.3bn for mis-sold credit card insurance.
Daily Telegraph Report
The Race Continues
August 2013 – The race to be the building society that pays the lowest interest rates continues. At the same time the race is on to be the one that gives the biggest percentage pay increase to board members. The Nationwide (On Your Side?) Building Society continues to be well to the front on both counts.
Daily Telegraph Report – Savers Hit by Another 120 Rate Cuts
Daily Telegraph Report – Savers’ Death by 750 Cuts
Nationwide Building Society Chairman Likens Bankers to Pop stars
July 2013 Nationwide Building Society Annual Insult took place at Manchester where once again the chairman explained why the directors had helped themselves to so much of members’ money.
Geoffrey Howe, the chairman, explained that there were various reasons. One being that they believe themselves to be like pop stars (he is deadly serious). The main one is that they consider themselves to be worth the money (no arrogance there then).
Other reasons are:
Greed.
Bonuses are based on easily achievable targets.
The apathy of members who failed to bother to vote.
The Quick Vote Trick (a trick not used by banks or plcs).
They can help themselves to as much as they like and no one can stop them.
The chairman, stated – “This is a society problem, this isn’t a Nationwide problem,” he said. “There is a huge mismatch between what pop stars earn, footballers earn, business people earn, bankers earn and what the man on the street earns”.
It seems that the chairman recognises his greed as a problem that lesser mortals clearly fail to understand.
He also said that “although directors pay is increasing, overall employee salaries will be lower this year because of job cuts”. It must be very pleasing for employees who have been made redundant to know that they have been able to help to subsidise directors pay.
A Nationwide Building Society “spokesman” said the bank (yes bank) had rewarded its executives in line with the company’s remuneration policy. The policy, in a nutshell, appears to be non-executives fill the executives pockets with ever increasing amounts of members’ money which then justifies filling their own pockets with ever increasing amounts of members’ money. That is what is meant by mutuality. “On Your Side?”
Read more at Thisismoney (James Salmon)
Read More at Financial Mail (Toby Walne)
Read International Business Times
Herald Scotland (No Wonder We Don’t Understand Fat Cat Pay)
Joe Studwell – WordPress.com
David Mitchell
Nationwide Building Society directors are often criticised by members and by the press for being money grabbing fat-cats whose only interest is in lining their own pockets with as much of members’ money as they can possibly get away with.
But is it Fair to Criticise the Directors?
Building Societies Betray Their Savers
August 2013 – Telegraph report by Richard Dyson on the rapid reduction of interest rates for savings accounts compared with the rapid and ever increasing boardroom pay levels.
Telegraph Report
Nationwide Building Society Bonds
July 2013 – This building society is believed to be preparing to issue a £500 million corporate bond within a matter of weeks to help plug a capital hole of £1bn to £2bn. A second bond of between £500m and £1bn may also be issued later.
The Scotsman Report
BBC – Robert Peston
Nationwide Building Society (On Your Side?) – Another Bumper Year for Lining Directors’ Pockets
July 2013 – The directors of this “mutual” society have awarded themselves yet another massive (16%) pay increase despite a £1bn to £2bn capital shortfall!
Is it any wonder that there is a capital shortfall when the directors can help themselves to as much of members’ funds as they like?
Deborah Hargreaves, chair of the High Pay Centre, said of Graham Beale’s package. “This is a lot of money for running a mutual. These building societies and mutuals try to make out they are very ethical. If I was a member I think I would have a few serious questions to ask.”
Members can ask all the serious questions they like but unless they vote against all of the board’s resolutions the directors will continue to help themselves to ever larger portions of members’ funds. Members may wonder why the board can pay itself so much yet fail to perform better for the benefit of members with savings accounts than other smaller building societies and banks.
The report from Thisismoney states that a Nationwide spokesman said: “We pay for performance. We recognise achievement …..” That must be quite an insult for the rest of the workforce.
A Toxic Shock from Private Eye
Like other crisis-hit institutions, Nationwide also fell victim to the lure of ‘innovative’ financial products. Its treasury department – which is supposed to make solid investments in such things as government gilts or highly-rated bonds that can be easily sold if necessary – still has £7 billion in hard-to-sell “non-core” investments, including the now-infamous US-mortgage backed “collateralised debt obligations”, US student loans, and Eurozone bank debt.
These have reduced from their credit crunch peak of £26 billion but still remain bigger than the amount Nationwide holds in its reserves.
But one Nationwide member who hasn’t suffered from these activities is CEO Graham Beale, who pocketed over £7 million between 2009 and 2012. With the society’s AGM coming up in July, Nationwide’s members may want to ask Beale just how his fondness for some distinctly bank-like practices tallies with the society’s claim that its “main focus” is serving their interests.”
Click Here for June Thisismoney Report
Click Here for July Thisismoney Report
Huffington Post
38 Degrees Campaign
On Your Side?
We recommend that members vote AGAINST ALL resolutions
NEVER NEVER USE THE “QUICK VOTE”
Alan Debenham will be attending the AGM. You can nominate Alan as your representative if you wish. There is no need to provide an address.
The AGM will be held in Manchester again where few members attend and the board has an easy time. An army of Nationwide employees will be on hand – probably outnumbering the members. The complaints will flow again about the greed and the board will, as always, play their pre-recorded reply tape. This will tell members all about the things that the directors will not do if they do not get bonuses. How the society would suffer if they did not all give themselves big pay increases every year, how irreplaceable the directors are, couldn’t possibly do the job for less money, etc., etc.
Nationwide Building Society Cuts Rates Across Multiple Savings Accounts
July 2013 – This society has made severe cuts to savings interest rates just ahead of the AGM at which the directors will explain why they must have a lot more of members’ money for themselves.
Nationwide is the biggest building society but rarely provides the best rates for its members only for directors – “On Your Side?”.
Telegraph Report
Chorley Building Society Voting Papers
April 2013 – Have the management of the tiny Chorley Building Society produced the most undemocratic ballot paper of the year?
The front page presents the members of this society with one choice – the infamous “Quick Vote”.
Our Comment – It is a shame that the directors are not allowed to complete the voting papers themselves but they come pretty close to doing just that.
This one takes some beating!