It was a move that no-one outside of the senior brass at both organisations seemed to know anything about until the announcement was made on Tuesday morning.
Normally, the gossip circles of the mortgage market are at least filled with part of the story or an inkling that a major acquisition or merger was imminent, but not this time, as both sides did a sterling job of keeping their cards close to their chests.
The move has been hailed by pretty much everyone in the market, bar the odd competitor of course, as many observers and commentators have been clamoring for a force to emerge to challenge the dominance of HBOS in the mortgage market.
This merger is still a year away and it will be up to the new mutual, to be known as Nationwide, to put its money where its mouth is, but the predictions are that it will at least increase its capabilities, especially with its move into the sub-prime market.
The big question for intermediaries is how the new proposition will look.
With many brokers having previously been critical of Nationwide’s service standards, the hope is that matters will improve and Nationwide has already pledged to look at Portman’s trading platform to see if it is a better bet than the trading upgrades already in the planning stages.
The early signs are that Nationwide will use a multi-brand strategy for intermediary business, but while finance director Graham Beale, who will become chief executive of the combined mutual next year, says that is a “fair working assumption” he stresses that plans can change in a year.
While the Nationwide/Portman deal stole everyone’s attention this week, the most talked about lender new entrant to the market, Edeus, finally launched.
Not one to do things in a low key fashion, chief executive Michael Bolton chose the Odeon in Leicester Square for the big launch bash where a half-hour feature length film about a spoof TV investigator searching for the mysterious phonemenon called Edeus that he had heard would revolutionise the mortgage broking market, yet he had no idea who or what Edeus was.
While slightly cringe-worthy, the well-produced film was also quite amusing, as was the sight of holograms of Bolton and managing director Alan Cleary explaining how the proposition works while showing off Edeus’ desktop cartoon characters, the female Edea and male Edeo.
Bolton admitted that it would be impossible to live up the hype generated, which is not surprising when you hire out the Odeon with red carpet, copious amounts of champagne and topless waiters (male topless waiters, by the way).
Elsewhere on a more sobering theme, and a worrying report into the sub-prime market has been released by Standard & Poor’s indicating that as more and more people are getting into arrears, so lenders are starting to dip further into their reserves.
Much has been written over the past year about lenders having to set aside millions for bad debt provisions, while it is not rocket science to realise that any future recession could turn current problems into a catastrophe for some lenders, which would certainly change the mood of an otherwise optimistic mortgage market.