Nationwide seeks Irish business

The Nationwide wants to offer Irish savings accounts

The Nationwide building society, one of the UK's biggest mortgage lenders, hopes to set up in the Irish Republic.

The building society wants to start next year by offering savings accounts to customers, which will be operated online and by post and telephone.

It has asked for permission from the UK's Financial Services Authority (FSA) and its Irish counterpart, the IFSRA.

The Nationwide said it was a "prudent strategic move" and was aimed at geographical diversification.

"We are looking at this stage at early to mid-2009 if all goes to plan," said a Nationwide spokesman.

"But we have yet to make a formal application," he pointed out.

The Nationwide is by far the biggest of the UK's remaining 59 building societies.

It has more than 800 branches and accounts for just over half of all outstanding mortgage lending by UK building societies.

However, it has no immediate plans to open a branch in the Republic and it does not intend to offer mortgages to potential customers there.

Nor will any of its new savers have a vote in its affairs.

"Their accounts will be deposit accounts, and therefore they will not be voting members of the society," the spokesman explained.

One advantage of the move for the Nationwide is that it would give it a business in the eurozone.

That, in turn, would make it able to access some of the funds that the European Central Bank has been making available to financial institutions in the eurozone, to ease the funding problems they have been facing for the past year because of the credit crunch.

"It will help extend our reach for retail savings and also ECB funding for banks in the euro area," the spokesman said.