Nationwide Building Society has abandoned plans to open a business bank in the UK due to market volatility caused by the coronavirus pandemic.
The lender said on Friday that due to assumption changes to short and long-term interest rates, entering the business banking market was “no longer commercially viable” and that instead, it will be prioritising “supporting its members through the immediate and longer-term financial implications of [coronavirus]”.
Nationwide estimated that the reversal in strategy will cost around £70mln in 2020, although it said running cost and investment savings will make this net neutral over the next 24 months.
“Our priority as a building society must always be our existing members and employees. [Coronavirus] has changed the medium-term interest rate landscape, meaning the business case for entering the market is no longer viable”, said chief executive Joe Garner.
“Therefore, our absolute focus will be on supporting our members and our employees through the immediate difficult time and future financial implications of the virus”, he added.