- Nationwide already facing criticism amid Virgin Money deal
Nationwide has come under fire for banning members from attending next month’s annual general meeting in person.
The mutual, founded in 1884, is already facing criticism for not giving its 16million owners a say in the £2.9billion takeover of rival lender Virgin Money.
Campaigners plan to voice their opposition to the deal – the biggest in banking since the financial crisis – by voting against Nationwide’s entire board of directors who are up for re-election at the meeting.
This dissent comes against the background of concern over the potential impact on Virgin Money and Nationwide if a Labour government imposes a swingeing new bank tax.
Most big companies have adopted a ‘hybrid’ approach to their AGMs, using technology to enable shareholders to attend the gatherings virtually while still allowing them the right to tun up personally to hold their company to account.
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But Britain’s biggest building society has taken the unusual step of again making its meeting exclusively online.
The move surprised some members, who feel that they should be able to have their voice heard in person.
John Dawson, a 70-year-old retired baker from Preston, had planned to go to Nationwide’s AGM to express concern about the Virgin Money deal.
But when his voting pack arrived in the post he found the meeting was online-only.
‘So I’ve sent it back and voted against every resolution’ in protest, he told The Mail on Sunday.
Shareholders in Virgin Money have approved the buy-out, which will create Britain’s second biggest savings and loans group after Lloyds.
The deal still awaits the blessing of regulators.
However, the tie-up could be at risk if a new bank tax is introduced after the General Election that could raise up to £55billion over the next five years.
The Mail on Sunday recently reported there are growing calls from across the political divide for commercial banks to stop receiving interest on more than £700billion of deposits they are forced to hold at the Bank of England.
Banks and building societies have enjoyed huge windfalls on these deposits in recent years as interest rates soared to 5.25 per cent.
Rachel Reeves, who is widely expected to be the next Chancellor of the Exchequer after voters go to the polls in the General Election on July 4, has said that Labour has ‘no plans’ to scrap interest payments to banks but, significantly, has not ruled it out.
Analysts at Barclays investment bank reckon Virgin Money would be hardest hit if the interest rules were changed, with earnings falling by up to 60 per cent.
Nationwide would be the next most exposed, it added.
Campaigners have mustered more than 5,000 signatures in a petition which demands that Nationwide members are allowed to vote on the Virgin Money deal.
They say that the lender’s refusal has set ‘a dangerous precedent’ with the mutual ‘effectively becoming an autocracy rather than the democracy it is supposed to be’.
‘Voting against all resolutions…is the only effective method of protest left open to Nationwide members who feel treated with contempt by a mutual society that is supposed to adhere to democratic principles,’ said campaign leader Mikael Armstrong.
Swindon-based Nationwide struck the £2.9billion deal to buy Virgin Money in March.
Nationwide is the latest company to try to stop owners attending AGMs in person.
In a letter to members ahead of the AGM, Nationwide said that ‘following last year’s successful introduction’ of the digital-only event it wanted to give all members ‘the opportunity to take part from their own homes.
‘That includes being able to vote and ask questions,’ it added.
The society told The Mail on Sunday that in-person AGM attendance had fallen rapidly in recent year with only 32 members turning up in 2022.
Only five complaints about the online-only format had been received in the last two years, it added.
But other firms have come under criticism for the way they conduct their AGMs.
Marks & Spencer chairman Archie Norman was forced into an embarrassing climbdown last year after the retailer was accused of being ‘arrogant’ and setting ‘an appalling precedent by trying to make its annual meeting online-only.
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