Research Update: Nationwide Building Society Affirmed At 'A+/A-1' After Announcement Of Virgin Money UK Acquisition; Outlook Stable

U.K.-based mutual Nationwide Building Society (Nationwide) has made a firm offer to acquire Virgin Money UK PLC (VMUK) for a recommended cash acquisition, which remains subject to regulatory and VMUK shareholder approvals. This would establish Nationwide as the U.K.'s second-largest provider of mortgages and savings, while increasing its presence in other retail products, as well as business banking. Nationwide's excess capital and earnings buffer, combined with a multi-year integration timeline, should, in our view, help mitigate the execution risk arising from the transaction. We therefore affirmed our 'A+/A-1' issuer credit ratings on Nationwide, and our 'AA-' long-term resolution counterparty rating. The outlook remains stable, since we expect Nationwide to continue to deliver a resilient performance and maintain a robust balance

...- U.K.-based mutual Nationwide Building Society (Nationwide) has made a firm offer to acquire Virgin Money UK PLC (VMUK) for a recommended cash acquisition, which remains subject to regulatory and VMUK shareholder approvals. - This would establish Nationwide as the U.K.'s second-largest provider of mortgages and savings, while increasing its presence in other retail products, as well as business banking. - Nationwide's excess capital and earnings buffer, combined with a multi-year integration timeline, should, in our view, help mitigate the execution risk arising from the transaction. - We therefore affirmed our 'A+/A-1' issuer credit ratings on Nationwide, and our '##-' long-term resolution counterparty rating. - The outlook remains stable, since we expect Nationwide to continue to deliver a resilient performance and maintain a robust balance sheet, while mitigating execution risks arising from the VMUK acquisition....

Research Update