The ratings on U.K.-based Nationwide Building Society reflect its strong position in the U.K. mortgage and savings markets, which will be reinforced by the prospective merger with Portman Building Society (not rated) due to be completed by end-September 2007. The ratings also benefit from Nationwide's good asset quality and capitalization. Absolute profitability is low, reflecting the strategy to reward members through competitive pricing. Nationwide is the U.K.'s largest building society and is committed to retaining its mutual status. With total reported assets of £129.6 billion ($242.3 billion) at Sept. 30, 2006, Nationwide ranks as the seventh-largest U.K. financial services provider. The addition of Portman's assets (£18.7 billion at June 30, 2006) will make Nationwide the second-largest U.K. mortgage lender and
