Nationwide has halted plans to enter the business banking market and returned £50 million in RBS bail out money to the Banking Competition Remedies Board
Last May Nationwide was awarded a £50 million grant from the RBS bailout fund to help it move into business banking, matching its own £50 million commitment.
The building society also picked 10x Future Technologies, the fintech startup founded by former Barclays boss Antony Jenkins, to help build the tech platform for the new business current account.
In a statement, the UK building society says: "The impact of Covid-19, including assumption changes to short and long-term interest rates, has meant that the option of entering the business banking market is no longer commercially viable. As a consequence of its decision, Nationwide will cease activity directly related to its proposed market entry, it will return the £50 million grant funding it was awarded from the Banking Competition Remedies’ Capability and Innovation Fund, as announced in May 2019, and won’t participate in the Incentivised Switching Scheme."
Nationwide estimates the costs of cancellation will be in the region of £70 million in 2020 but running cost and investment savings will make this a net neutral cost over the next 24 months. All employees will be redeployed to other roles within Nationwide.
Nationwide says that it plans to continue to work with 10x Future Technologies in the application of the platform for the Society’s existing and future product ranges.
Nationwide's retreat follows an earlier announcement by Metro Bank to return £50 million to the RBS bailout fund after downgrading its plans for branch expansion over the coming years.