Nationwide logo and high street bank branch in UK city.
Image courtesy of P.Cartwright/ Shutterstock.com

Nationwide’s takeover of Virgin Money is being investigated by the Competition and Market Authority (CMA) to ensure the acqusion compalies with the Enterprise Act 2002.

The CMA is probing whether the acquisition could result in a “relevant merger situation” under the merger provisions of the Enterprise Act which could in turn affect the competitiveness of the UK retail banking sector.

Interested parties have been given until 14 June to offer comments to the CMA’s investigation. The deadline for a phase one decision has been set at 26 July. 

Nationwide’s £2.9bn takeover of Virgin Media was announced by the high-street banking giant in March this year, in a move approved by the leadership of both businesses.

Commenting at the time of the transaction, CEO of Virgin Money, David Duffy, stated: “Together the combined group can offer more great products and services to a larger customer base.”

The development will significantly expand Nationwide’s presence on the UK high-street, where it is focusing much of its efforts as part of its customer guarantee to not close any local branches until at least 2026.

This does not mean that Nationwide has been exempt from the flurry of retail banking closures which has spread  across the UK in recent years, however. Opening hours have been reduced at 88 of its locations, which were converted to Multi-Skilled Branches (MSBs).

However, the company has made it clear that it is committed to UK retail banking at a time when many banks have been closing the doors on high-street branches, citing more customers using digital banking services rather than physical ones.

The acquisition of Virgin Money will add the company’s 86 locations to Nationwide’s existing portfolio of close to over 600 branches. The CMA will now probe whether or not this will give Nationwide a significant competitive advantage over its competitors, at a time when many of its competitors are choosing the digital route.