Forget poetry, Nationwide – just open branches
AS THE nation’s largest building society – by a country mile – Nationwide is a flag-waver for the benefits of ‘mutuality’ in the provision of financial services. More customer than shareholder focused.
Unlike listed financial companies, such as Royal Bank of Scotland, that are beholden to shareholders (the Government in RBS’s case), Nationwide exists to serve its customers who as ‘members’ are its owners.
While it needs to make profits to keep investing in its business, it is not distracted by external shareholders keen to earn a juicy dividend payment t wice a year. Customer first, second and third.
On the whole, Nationwide wears the mutual badge rather well, offering a good interest-paying current account, encouraging customers to
recommend it to friends (through cash incentives) and rewarding loyal customers with special deals.
Yet my gut feeling is that it could be doing even more to demonstrate that it (and its ilk) is different from the high street banks. That it really cares.
For a start, the remuneration of the society’s directors remains wholly out of step with the principles underpinning mutuality.
Unlike most other building societies that have December 31 year ends, Nationwide’s accounting year is to early April. So it is too early to find out how much remuneration (pay, bonuses, pensions and other benefits) its executives received in the society’s financial year just ended.
But I would put a small bet on a) its executive directors having taken home more than in the previous year; and b) chief executive Joe
Garner receiving more than the £2.3 million package he trousered in the year to April 2018.
While Nationwide says Garner’s remuneration is dwarfed by that earned by the bosses of banking rivals, it is a disingenuous argument.
At a time of low interest rates – and poor savings returns – Nationwide’s executives should be seen to be ‘sharing’ the pain. For example, by forgoing some of their bonuses. Wouldn’t that be a good example of mutuality acting in the best interests of customers? Of course it would be. On branches, Nationwide could also be doing so much more to demonstrate its mutual virtues.
Watch its adverts currently doing the rounds on TV starring poets and you would think that Nationwide is intent on saving the high street from destruction. But this is simply not the case.
Although it has pledged not to leave a city or town it currently has a branch presence in for the next two years, this is hardly a demonstration of an organisation investing in the high street. Just standing still.
It also begs the question of what happens when the two years are up – no doubt, a raft of closures.
If Nationwide truly wanted to differentiate itself and make itself loved by a phalanx of potential new customers, it could do what it did this time two years ago in Glastonbury, Somerset.
That is, open new branches in communities that have been deserted by all the big banks.
At the time of the Glastonbury branch o peni ng, Nati o nwide i ndicated it was prepared to do as much. But silence has prevailed.
A two-year moratorium on branch closures i s not a demonstration of mutuality working in the best interests of the consumer. It is called treading water. So Mr Garner, open new branches and make a real difference.
Poor returns for savers – but building s ociety bosses r eap bonanza: Page 108 ALTHOUGH a work or private pension remains the best way f o r most people to build longt e r m wea l t h , I do understand when readers contact me to complain about their baffling complexity and the myriad of rules they must comply with. Most of these rules were i ntroduced by Chancellors keen to keep a lid on the cost of the tax breaks savers enjoy. We have seen the consequences of this recently with doctors, some of whom are refusing to work extra hours for fear of taking their earnings to a level that triggers a sharp reduction in the amount they can put into a pension without incurring big tax bills. A crazy state of affairs.
The latest pensions missive from the Association of Consulting Actuaries (ACA) encapsulates the ludicrous pensions world that governments past and present have now created.
It says: ‘ The ACA agrees that there is much sense in progressing GMP conversion and simplification in tandem with GMP rectification. However, we are concerned that the final GMP reconciliation process itself has been running since 2014.’ Que?
Help! I’m off i n search of a Fever-Tree Mediterranean Tonic Water. A large one.
Pledging not to leave a city in the next two years is hardly evidence of investment