• Advising on post merger integration
  • Provided advice and challenge to ensure an integration programme design for retail, contact centre and servicing operations protected customers from impact while delivering reduced costs


Synergy planning and Post Merger Integration

Nationwide acquired Portman Building society, a commercially energetic lender that had built a successful specialised lending business to run alongside its ‘best buy’ residential mortgage business. Nationwide needed to commit in its merger booklet to the future shape of the merged society and needed to develop with Portman robust business designs and plans to underpin these commitments. The society had decided to take early synergies by shutting down branches in overlap areas on Day One and rationalising call centres. A particular concern was how to do this without creating difficulties in delivering service.

We reviewed and validated management synergy estimates, for example from branch, call centre and servicing overlap. We provided full decision making support, as well as advice and challenge on programme design and management. David’s responsibility was to provide ‘advice and challenge’ to the Retail and Member Proposition workstreams, covering integration of branches and contact centres, branch closures, rationalisation of product portfolios, process change to support Portman ‘back books’, and planning for customer, savings and mortgage data migration. David provided advice to workstream sponsors and managers on the structure and content of the projects required, drawing on his experience of analogous change projects, for example mortgage data migration. He also led workshops and provided stakeholder management to develop and gain agreement to a detailed designs, particularly around the revised Branch Operating Model to enable Portman customers to present their passbooks, and receive service once the mortgage was effective.

David helped these critical workstreams deliver the plans and designs of the quality required to meet the integration fundamentals required of the programme by the societies’ boards. The plans were successfully delivered by Nationwide and Portman.

Of more concern was the impact of a ‘price war’ resulting in a price decline of 46% in a year. Facing this, management met EBITDA targets through volume growth and major cuts to most aspects of operational expenditure. In making these decisions, management was able to show it had, in the short run, properly considered risk. We recommended implementation of streamline controls on promotions, allowing a response to market development with better managed risks. We alerted the centre to the intensity of the price war, and recommended specific additional controls to ensure that overly aggressive decisions by local management did increase jeopardise the viability of the business.