The Building Societies’ Association has trumpeted the merger of Nationwide and Portman as an opportunity for a mutual to give the banks a run for their money.
The BSA claims its members do not get the same grief as banks for treating customers unfairly and it is healthier to have strong building societies in the mortgage and savings market.
The trade body says further consolidation of the sector cannot be ruled out.
The merger is expected to take place next September with the combined firm to be known as Nationwide Building Society, which the society says will be the second-largest mortgage lender in the country.
BSA spokesman Neil Johnson says: “The merger helps competition as building societies are very different to banks. You can see all the grief banks are getting which societies are not, and that is an important point for the market.
“Building societies are, and will remain, an important part of the financial services industry and will continue to flourish by offering good value to their members.”