Competition watchdog opens probe into Nationwide-Virgin Money deal

The Competition and Markets Authority has invited interested parties to comment on the all-cash deal, and has until 26 July to decide whether to press ahead with a more in-depth phase 2 probe.

The regulator said the phase 1 investigation would consider if the proposed merger could result in a "substantial lessening" of competition.

The unusual takeover of a listed bank by a member-owned building society, first announced in March, would create the UK’s second-largest savings and mortgage provider.

The recommended offer was put to Virgin Money shareholders earlier this month, with investors voting in its favour. Nationwide members have not been asked to vote.

Publishing Nationwide’s annual results last week, chief executive Debbie Crosbie said the tie up offered an "exciting opportunity to create a more diverse business".

Nationwide is currently the country’s third-largest mortgage provider, while Virgin Money is the UK’s sixth-largest retail bank by assets with around 6.6m customers.