Nationwide’s £2.9 billion takeover of banking firm Virgin Money has been cleared by the UK’s competition regulator.

The building society agreed the takeover of its London-listed rival in March.

In May, the Competition and Markets Authority watchdog launched an initial merger inquiry to consider whether the deal – the biggest UK banking merger since the financial crisis – could “result in a substantial lessening of competition” within the UK market.

On Friday, the CMA said it cleared the deal and there is no need for further investigations after finding that there is not a “realistic prospect of a substantial lessening of competition” from the takeover.

The firms now expect to be able to complete the deal by the end of the year.

Nationwide chief executive Debbie Crosbie said: “This is another important step on the path to completing the acquisition of Virgin Money, with all the benefits for members and customers that this will bring.

“We remain on course to receive all the necessary approvals to complete the deal in the final three months of this year.”

A Virgin Money spokesman said: “We welcome the CMA’s decision to unconditionally clear the proposed acquisition by Nationwide following its Phase 1 investigation.

“The enlarged group will combine two complementary businesses that together can offer more great products and services to a larger customer base."