Portman Building Society

Portman Building Society
Building Society (Mutual)
Industry Banking and Financial Services
Fate Merger with Nationwide Building Society
Successor Nationwide Building Society
Founded 1846
Defunct August 2007
Headquarters Bournemouth, England, UK
Products Savings, Mortgages, Investments,
Loans, Insurance, Pensions
Website www.nationwide.co.uk

The Portman Building Society was a UK mutual building society, providing mortgages and savings accounts to UK consumers and offering loans to commercial enterprises. Its head office was located in Bournemouth and its administration centre in Wolverhampton. Portman merged with the Nationwide Building Society in August 2007,[1] at which time it was the third largest building society in the UK and the largest regional building society in the south of England, with 154 branches and assets exceeding £15 billion.

History

Merger

On 12 September 2006, the society announced plans to merge with the Nationwide Building Society, creating a mutual body with assets of more than £150 billion.

Portman Members Against the Takeover, a protest group created against the merger, argued that "there is nothing wrong with Portman; it can exist on its own",[2] and cited loss of jobs, customer service and members' interests as reasons that the merger should not go ahead.[3] The campaign attracted significant media attention. Bournemouth Counciller Ron Whittaker, himself a Portman account holder, appealed to Portman members to vote against the merger and "not to be taken in by handouts", in reference to the windfall offered.[4] Financial observers questioned the benefits of a merger (describing it as more akin to a takeover) citing issues such as job losses, less competitive rates and lower service standards as disadvantages.[5]

Just months prior to the announcement of merger plans, Portman executive directors had argued that the interests of Portman members would be best served by it remaining an independent mutual building society.[6] As part of the merger tender presented by Nationwide, Portman executive directors were offered the incentive of higher paid jobs on the board of the Nationwide should the planned merger take place.[6] Portman executive directors had further personal interest in the merger being approved as a large portion of their bonuses were dependent on the merger being completed, a fact that was omitted from the merger booklet provided to Portman members and not disclosed until after the merger votes had been submitted.[6] Merger information presented to voters suggested that they should vote in favour of the proposed merger, advice in direct contrast to that expressed by the same Portman board before they had received Nationwide's incentive-laden offer.[6]

The merger was overwhelmingly endorsed by members at the society's AGM on 23 April 2007. After the Financial Services Authority (FSA) endorsed the members' decision on 26 July 2007, the society became part of the Nationwide on 28 August 2007. When the merger was announced it was anticipated that it would result in 900 redundancies.[7]

The Portman chief executive Robert Sharpe received a golden handshake of £1.7m[8] and a pension worth £152,000 per year.[9] He subsequently became chief executive of West Bromwich Building Society.[8]

References

  1. 1 2 3 Building Society Mergers and Conversions since 1980 Building Societies Association website (Retrieved 5 April 2007)
  2. ↑ "Rebels claim Portman/Nationwide merger will be the end of mutuals". The Independent. 28 January 2007. Retrieved 4 March 2014.
  3. ↑ Portman Protest web site – the unsuccessful campaign against the merger of the Portman Building Society with the Nationwide Building Society
  4. ↑ "Portman members urged to vote 'no' to merger". Daily Echo. 13 March 2007. Retrieved 16 November 2009.
  5. ↑ "Portman BS takeover – who are the winners?" (PDF). Money Facts Group. 14 March 2007. Archived from the original (PDF) on 4 October 2011. Retrieved 16 November 2009.
  6. 1 2 3 4 "FSA – Portman Nationwide" (PDF). FSA.gov.uk. 26 July 2007. Retrieved 16 November 2009.
  7. ↑ "Job losses in Nationwide and Portman merger". Banking Times. 29 August 2007. Retrieved 16 November 2009.
  8. 1 2 Armitstead, Louise; Ebrahimi, Helia (19 May 2009). "West Brom chief Robert Sharpe goes elsewhere for his mortgage". London: telegraph.co.uk. Retrieved 16 November 2009.
  9. ↑ Seib, Christine (24 October 2007). "Portman chief to get £1.7m payoff". London: timesonline.co.uk. Retrieved 16 November 2009.
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