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Building society spat over merger plan

Kent Reliance's Mike Lazenby says the merger deal "doesn't make sense"
Kent Reliance's Mike Lazenby says the merger deal "doesn't make sense"

NATIONWIDE Building Society has denied claims by a Kent boss that its proposal to merge with the Portman amounts to "carpet-bagging".

Mike Lazenby, chief executive of Kent Reliance Building Society and a former director at Nationwide, made the accusation after Nationwide and Portman chiefs surprised the industry by agreeing to create the UK’s second largest mortgage lender.

If the deal goes through after a members’ vote next year, it will create a mutual with total assets of £150billion and 13 million customers. But Mr Lazenby said he could was mystified by the decision.

He said: "It’s very unusual that a building society like the Portman, which is very aggressive, and has a track record of buying up small building societies, should all of a sudden be acquired by the Nationwide. It just doesn’t make sense.

"Nationwide are the ultimate carpet-baggers. They’ve got Portman on the cheap. That doesn’t mean it’s a bad deal. It’s an excellent deal."

But Steve Blore, a Nationwide spokesman, said the proposed merger was the "complete antithesis" of carpet-bagging. It was a good deal for members, with around 70 per cent of Portman’s assets going back to them.

He could not understand Mr Lazenby’s concerns. "We can always rely on him to be provocative," he added.

Mr Lazenby said he was not concerned about competition from a larger player. As the country's fastest-growing society, Kent Reliance had nothing to fear. He welcomed the merger because he believed the process would take Nationwide’s "eye off the ball".

Mr Lazenby did not rule out any possible future merger involving Kent Reliance "but only if we could continue with the Kent Reliance way because that has proved to work".

If it goes through, the Nationwide/Portman merger will reduce the number of building societies to 61 - down from 2,400 a century ago. But it would not spell the end of the mutual principle. "Mutuality in Kent is alive and kicking," insisted Mr Lazenby.

However, he expected the number of building societies to continue to fall. He could foresee a time when there were just three - Nationwide, Kent Reliance and one other.

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