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Nationwide has said it could take up to six years to fully absorb Virgin Money, as it promised to address its customer service and IT shortcomings after taking over the rival bank.
The building society defended the £2.9 billion takeover to members during its annual general meeting (AGM) on Wednesday.
Debbie Crosbie, Nationwide’s chief executive, said there had been a “huge amount of careful consideration of both the risks and opportunities” of buying Virgin Money.
But she said the building society was “very confident that the profits will more than cover any costs of integrating the business”.
She also said the bank’s range of credit cards was one of the reason why it decided to buy it.
However, integrating Virgin Money into Nationwide is likely to take several years to complete.
It means that customers of Virgin Money will continue to see the bank as a separate brand, with its own high street branches, for between four and six years.
This is partly because one of the “challenges” facing Nationwide is improving the rival bank’s customer service and its IT systems.
Ms Crosbie said the building society would be “on the case” after facing questions from members, several of whom said they thought Virgin Money’s support systems needed improvement.
The boss also said that any new and existing customers of Virgin Money can be “comfortable in the knowledge that it is owned by a mutual, not listed shareholders”.
Eventually, Virgin Money savers and borrowers are set to become Nationwide customers, but this will not happen automatically.
Crucially, Nationwide still needs to get the approval of regulators in the UK before it can go ahead with buying the bank founded by business mogul Sir Richard Branson.
It is expecting to get a decision from the Competition and Markets Authority and the Prudential Regulation Authority in September, paving the way for the takeover to complete in the autumn should it get the green light.
