Swindon-based Nationwide has officially completed its £2.9 billion purchase of Virgin Money.

Bringing together two of Britain’s largest retail lenders will make the Piper’s Way company the second-largest provider of mortgages and savings in the UK.

It is already the largest building society in the world.

The acquisition promises an “enhanced investment in customer service and a wider range of products” for the combined 24.5 million customers at nearly 700 branches.

For current customers, Virgin Money has provided reassurance it is “business as usual” with no impact on services while Nationwide says all Virgin Money profits will be retained for the benefit of customers.

Debbie Crosbie, Chief Executive of Nationwide, said: “Nationwide is now a stronger mutual and able to deliver even greater value through our unique Branch Promise, leading customer satisfaction, and competitive savings and lending rates. 

“All Virgin Money profits will be retained for the benefit of customers and, for the first time in the UK, a full service business bank will be part of a large and modern mutual.”

In the last financial year, Virgin Money generated pre-tax profits of £345 million and announced distributions of around £270 million to shareholders.

Nationwide has said these profits can be used to improve Nationwide’s financial strength and to improve the service, benefits and incentives for members.

A spokesperson previously added: “Bringing the established business banking services of Virgin Money into the Nationwide Group will give us a broader and more diverse product range.

“This will make our income more resilient to economic changes and help protect the better interest rates on savings and borrowing that we offer.

“It also means we can start to support small and medium-sized businesses more quickly.”

An October 1 London Stock Exchange announcement states: “The boards of Virgin Money and Nationwide are pleased to announce that… [the acquisition] has now become effective and the entire issued and to be issued share capital of Virgin Money is now owned by Nationwide.”

Virgin Money’s shares have been cancelled from trading on the London Stock Exchange.(Image: Mike Egerton/PA)

The finalisation comes after a spirited campaign in protest of the sale by Nationwide members.

They demanded a vote on the decision to buy Nationwide, concerned about the cost of merging the businesses which they worried could impact customers.

Nationwide has provided reassurance that the businesses will be merged gradually and systems and services will only be combined when it is “sure of minimal disruption”.

A Nationwide spokesperson explained: “We plan to bring the two businesses together gradually. 

“Virgin Money will join Nationwide as a wholly owned subsidiary with a separate board, management team and banking licence. It will be run separately for a number of years.

“This will allow us time to decide whether it is in the interests of members to combine some systems or services.

“Unlike mergers between banks in the past, our approach does not rely on quick integration or aggressive cost reduction.”

Existing Virgin Money and Nationwide branches will remain open side-by-side until at least 2028, as Virgin Money branches are now covered by Nationwide’s ‘branch promise’.

A Virgin Money spokesperson promised: “We’re excited about our future as two purpose-driven businesses with a shared goal of supporting our customers, colleagues and communities.

“As we integrate Virgin Money and Nationwide carefully over time, the benefits we offer to our customers will only increase.”

Nationwide is a mutual, meaning it is owned by its members rather than shareholders like most UK banks.

It has been one of the largest employers in the town since it moved its headquarters to Pipers Way in 1992.