Making a big business out of mutual status

Nationwide

Nationwide is the world&#39s largest building society, offering a broad range of retail financial services including mortgages, savings, current accounts, credit cards, life assurance and investment products, personal loans and household insurance. Today&#39s Nationwide is the product of over a hundred mergers, most notably the one between Nationwide and Anglia in 1987. Nationwide is headquartered in Swindon and has branches around the country.

Subsidiary UCB Home Loans provides mortgages for buy-to-let and for the self-employed.

Q: How is Nationwide structured?

A: Nationwide has mutual status which means that we are owned by our members and run day-to-day by an executive management team overseen by an elected board of directors.

Our branch network extends throughout the country with around 700 branches and 200 branch agencies. Nationwide also has 24 mortgage centres throughout the UK.

Q: What sets you apart from your competitors?

A: The philosophy behind our approach is based on delivering better value with fairness, honesty and transparency. Unlike banks, who put shareholders first, we are run for the benefit of our members. This has allowed us to return around £2.7bn to members since 1996 through better interest rates and fewer charges.

Q: What are the pros and cons of your core product range?

A: Our mortgages help intermediaries offer clients some of the best value deals in the market. Our base mortgage rate is currently 5.14%, which is around 0.85% less than the standard variable rates of most high street competitors. Nationwide also offers a free legal service for remortgage customers. Mutual status means we can offer products with lower charges. For example, we do not charge mortgage indemnity guarantee. The downside is that we offer loans to a maximum LTV of 95%. However, we believe this is the most prudent way of doing business.

Q: What is your distribution strategy?

A: We have a branch network, customer call centres, online banking facilities and postal accounts. Mortgage customers can also apply via brokers. We offer our full mortgage range through intermediaries who introduce around half of our mortgage business. Intermediaries can conduct business with us either through our branches, through one of our mortgage centres or by submitting applications online.

Q: Do you use mortgage packagers?

A: No we don&#39t.

Q: What services do you offer to intermediaries?

A: We have implemented systems to streamline administration processes and have developed a strategy for generating and maintaining relationships with intermediaries. This brings together Nationwide intermediary managers, area managers and branch managers.

The society has established a Premier Service Unit which is a specialist centre for large loans. The PSU gives intermediaries access to underwriters with the expertise to process large loans quickly.

Nationwide has a priority service for online case submissions through the Mortgage Trading Exchange and also provides intermediaries with a &#39takeaway remortgage&#39 service which contains a guide to take the borrower through the remortgage process and provides them with a quick and easy remortgage service.

Q: What impact will regulation have on your business?

A: The regulations will change the way introducers approach companies. We are strongly committed to intermediaries and will be working closely with them to ensure we can continue to do business with each other in the regulated environment. We are in the process of developing systems and processes to ensure they are in line with the regulations.

Q: How do you see the intermediary market in two years&#39 time?

A: The industry is undergoing a fundamental change and it is difficult to predict what the impact of regulation will be. Lenders will have to revamp their processes to be compliant and all parties will be heavily reliant on technology because of the need to provide audit trails. This will mean e-trading, for example, will be a high priority.

Nationwide continues to offer a limited range of competitively priced products based on affordability rather than fixed multipliers. This strategy serves it well and brokers know where they stand. Provided the applicants are not over-stretching themselves and have a good record Nationwide will usually oblige. The excellent SVR generally means that once a client is with Nationwide there is little need to look elsewhere on review. Not good news for the commission-only broker but great service for the client. The remortgage package is particularly good. Overall I would rate the service as very good.

Nationwide is a fair, transparent lender. It is a well trusted brand with a strong reputation both in the trade and on the high street. Products are always there or thereabouts and it allows customers onto the best new deals when their terms end. However, service is not as strong as it should be for a lender of its size. You can put business through branches but brokers tend to use the large service centres where processing can be rather drawn-out. My experience may not reflect national service levels of course, but I think it could do better and offer a more consistent service.

I have always been happy to deal with Nationwide. Administration is fine largely because you can deal directly with a person rather than having to go through a computer or a telephone system. We have been dealing with it for years and have a particular person to contact. I am aware that dealing with a call centre is less straightforward. Nationwide&#39s products have got much better of late, having been less competitive up to the end of last year. Mutuality is fine but is not a big selling point for brokers. It&#39s ultimately about the products, which is why we use Nationwide regularly.