The UK building society says the initiative represents a 'prudent' strategic move to diversify its geographical operations and funding opportunities. The move would give the building society access to funds available from the European Central Bank to financial institutions in the Eurozone, thereby easing reliance on the crunch-afflicted British banking industry.

The UK's second largest savings provider says the Irish business will initially offer savings products by post, phone and over the Internet. It is currently seeking approval for the business from the Financial Services Authority (FSA) and the Irish Financial Services Regulatory Authority (IFSRA), with a view to a mid-2009 launch date.

Nationwide says it will provide further details on the business plan once the regulators green light the project.