The Competition and Markets Authority (CMA) has opened an investigation into a merger between Nationwide Building Society and Virgin Money.

The move comes just over a week after Nationwide agreed the terms of a £2.9 billion deal to buy the British company.

On Friday the CMA said that it is investigating whether the buyout will result in a substantial lessening of competition.

Last week, Nationwide said that if the buyout goes through it will create a "financially stronger" building society, with savings and lending rates that will, on average, be better than the market average.

The merged companies would create a group with total assets worth £366 billion, which they say would make the combined business the second largest provider of mortgages and savings in the UK.

Nationwide chief executive Debbie Crosbie said that takeover would add more value and broader services for its customers.

“More people will experience the benefits of mutual ownership and the customer-focused approach of a building society,” she continued.

If the acquisition is successful, its promise to keep branches open until at least the start of 2028 will also apply to Virgin Money branches following any existing plans for closures.

Nationwide confirmed that its chief financial officer (CFO), Chris Rhodes, would become the chief executive of Virgin Money once the acquisition is complete and Virgin Money’s current chief executive retires.

Muir Mathieson, Nationwide’s deputy CFO and treasurer, will become CFO of Nationwide.

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