The biggest ever building society merger moved a step closer after members of Portman voted in favour of a merger with Nationwide, the country's biggest mutual, yesterday.
In total, 93 per cent of Portman’s shareholder members – those with saving accounts such as ISAs – approved the merger, which creates a giant with total assets of more than #150 billion and 13 million members.
The deal needed approval from 75 per cent of shareholder members and by 50 per cent of borrower members with Portman mortgages. More than 92 per cent of borrowers also voted for the merger at the company’s annual meeting in Poole, Dorset.
Portman, the UK’s third biggest building society, has said it will pay out #500 million in windfall payments – around 65 per cent of its cash reserves. The maximum pay-out will be #1,000 before tax to its 1.1 million shareholder borrowers.
An average shareholder member of the Bournemouth-based mutual will gain #445 before tax, while around 120,000 borrower members will receive a flat #200 pre-tax payment.
Members will gain their windfall payments at the end of September after approval from the Financial Services Authority in July and the merger coming into effect on August 28.
Portman’s 153 branches will be added to Nationwide’s 860 outlets, although there are likely to be job cuts as overlapping branches are closed. Portman currently has about 2,500 staff, while Swindon-based Nationwide has more than 16,000 employees.
The move will also mean the disappearance of the Portman name more than 120 years after the Portman Chapel Temperance Permanent Benefit Building Society was founded in 1881.
Nationwide chief executive Graham Beale said: "The enlarged society will be a formidable presence on the high street, competing with the retail banks while retaining the benefits of a highly successful mutual."
Portman chief executive Robert Sharpe said: "I am very pleased Portman members have supported the board's recommendation to merge with Nationwide.
"In addition to the merger payment, members will benefit from an increased branch network and access to a wider range of products and services."
Yesterday's massive majorities in favour of the merger swept aside protests from some Portman members angry about the prospects of branch closures and an undisclosed pay-off to Mr Sharpe, who will retire once the merger is completed.
Members of the old Staffordshire Building Society have suffered following the Wolverhampton-based mutual's takeover by Portman in 2003.
It was announced in February that nine branches in the West Midlands would close following a review. They are at Albrighton, Bewdley, Bloxwich, Cradley Heath, Oakengates, Perton, Tettenhall, Willenhall and Wombourne.
The branches are due to shut on Saturday but staff have been offered alternative jobs at Portman branches.
Portman has also owned the Lambeth Building since last year.