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Nationwide closes yet more branches

The so-called "secretive closure" of Nationwide building society branches across the UK seems set to continue with more closures announced this week. Research by the Daily Mail indicates that 15 Nationwide branches have been closed over the past 12 months although there has been no official announcement to confirm this. It would appear that the UK mutual sector is under pressure, as are all financial sectors in the UK, to reduce costs and increase profitability.

The mutual sector has for many years been the backbone of the UK financial sector offering savers and borrowers exposure to the underlying profitability of the operation for the good of all customers. However, the last few months have seen problems at the Dunfermline building society, the old Bradford & Bingley as well as the West Bromwich building society. Indeed it was the West Bromwich building society which took the unprecedented step of converting some of the company's debt into new investment instruments thereby bringing in third-party investors for the first time ever.

While there are still significant differences between the traditional banking sector and the mutual societies there is no doubt that these differences are far less than they were a decade ago. The maximisation of profitability in the mutual sector is set to see further changes in the UK in years to come and ultimately it may be difficult to tell the traditional finance sector and the mutual sector apart.

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