London: KPMG's work with Nationwide Building Society helped bring greater stability to a major UK financial institution at a critical time.
2012 Operational Performance in the Private Sector winner
With the help of a highly successful large-scale cost-optimisation programme, Nationwide increased its 2011 profits by 30% to £276m, demonstrating its resilience to stakeholders and reinforcing the value of the UK's mutual sector.
The Society's margins had been under pressure due to the continuing low interest rate environment, rise in VAT, inflation in third party expenditure and £1bn ongoing investment in the business, as well as the integration of three recently acquired/merged smaller building societies.
In order to reduce its cost base, the joint KPMG/Nationwide team, strongly and visibly backed by senior management, gained buy-in across the organisation for a vast change programme impacting virtually every part of the business. Working tirelessly over two years, the team created efficiencies within administration centres and across the branch network, integrating regional brands, withdrawing from the Society's third party agency network improving procurement, redesigning core processes and consolidating IT.
The result was an extraordinary turnaround; the Society is now in the second year of its cost reduction programme and on track to deliver savings of over £200m over the period to 2012/13, while making impressive improvements in customer service quality.
Nationwide is well placed to build on its ranking as the UK's third largest mortgages and savings provider and the world's biggest mutual, serving 15m customers — a quarter of all British people. This exceptional transformation shows that mutuals remain a highly efficient and central part of the UK economy, which can only serve to preserve confidence in the wider banking system.