Securing customers' interests through mutual ownership
A Nationwide case study

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Page 1: The changing market for building societies

Building societies have a long history of caring for their members. They encourage them to save and help them to buy homes by lending them money at affordable rates of interest over long periods of time.

Until the 1980s the various operators in financial services concentrated on their own areas of expertise. Customers wanting banking services went to a bank; for insurance services they contacted an insurance company and for a mortgage they approached a building society.

However, in the 1980s the market for mortgages was deregulated and 'opened up' to new entrants. This change encouraged banks to enter the mortgage market alongside building societies. At the same time the 1986 Building Societies Act allowed societies to offer more financial services than previously. It also allowed mutual societies to demutualise and convert to banks.

Building societies: the choice

In 1989, the first building society demutualised and became a public limited company. Several other major building societies soon followed. Nationwide, however, is one of a number of mutual organisations whose management and members continue to confirm their wish to remain mutual and to stand by principles and values that originally led to building societies being set up.

Nationwide believes that its mutual status gives it a competitive edge in the mortgage loans market because of the clear benefits that mutuality brings to its members who are also its customers.

Nationwide Building Society

When Nationwide and Anglia merged in 1987, the new organisation had a larger branch network than any other society, not only in the UK but in the whole world. Today, Nationwide is the UK's fourth largest mortgage lender and remains a mutual organisation owned by and run for the benefits of its members.

By remaining mutual Nationwide aims to offer a broad range of services such as mortgages and other financial products while charging as little as possible for day-to-day services.

Nationwide | Securing customers' interests through mutual ownership