Nationwide’s £2.9 billion takeover of Virgin Money has been given the go-ahead by financial regulators but critics are worried about 

The acquisition has been approved by both the Financial Conduct Authority and the Prudential Regulation Authority.

This means “all relevant regulatory approvals have now been received”, Nationwide put in a statement to the London Stock Exchange and the acquisition is expected to be completed on October 1, 2024, as long as it is sanctioned at a court hearing on September 27.

The purchase has been controversial with some members ever since the offer to buy Virgin Money was confirmed in March this year.

Critics have questioned the value for money of the acquisition for Nationwide members and believe that members were entitled to a vote.(Image: PA)

James-Sherwin Smith helped run a campaign for a member vote. 

He said: “There's a concern that management time and resources will get directed toward the integration efforts and that the quality of services and the products offered will worsen during this transition period.

“The documentation says it's going to take them six years to do this, but they don't have a plan and won’t have a plan until they've bought it. 

“So I think members are anxious as to what happens next and what changes are going to occur.”

He added: “It's going to take a lot of money. The society made promises that won't happen but the proof of the pudding is going to be in the eating.”

He sees evidence for the financial burden in the price of Nationwide's FlexPlus current account rising from £13 to £18 per month in December.

In a statement announcing the clearance, a Nationwide spokesperson said: “We are confident in the quality of Virgin Money’s assets and the opportunities this deal brings for our members, following appropriate investigation and review.

READ MORE: Nationwide closes accounts of Virgin Money deal protester 

“We believe the price agreed for the Virgin Money business represents good value and will lead to immediate financial benefits for the Society and its members.”

They said more of Virgin Money’s profits will be invested in improving customer services rather than being paid to shareholders, and investment can be made in Virgin Money’s business banking offering.

Despite expecting “a significant financial gain”, they added that “the actual gain will depend on how much Virgin Money’s net assets are worth when the deal has gone through”.

READ MORE: Nationwide takeover of Virgin Money sparks member backlash

About a member vote, they added: “The requirement to hold a vote is governed by the Building Societies Act 1986 and depends on the outcome of specific financial tests. 

“These tests were fully considered and, because they were not met, the Board determined that a vote was not required by the Act. 

“The Societies' own rules also mean that, as a result, the decision is for the Board to take on behalf of the Society.”

The planned takeover will bring together Britain’s fifth and sixth largest retail lenders, creating a combined group with around 24.5 million customers, more than 25,000 staff and nearly 700 branches.

It plans to bring the two businesses together gradually to minimise disruption, with the two businesses being run separately “for a number of years”. Systems and services will only be combined when it is “sure of minimal disruption”.

Nationwide says it plans to add Virgin Money’s branches to its existing network of branches, but says “even where we have a Nationwide branch and a Virgin Money branch close by, we promise to keep them both open until at least the start of 2028”.

Following the deal, Nationwide will be the second-largest provider of mortgages and savings in the UK. It is already the largest building society in the world.