Banking

Nationwide Plans To Ditch Retail Banking Business

Insurance giant Nationwide has announced it is leaving the retail banking business.

Instead, the Ohio-based company will move its deposits and loans to another financial institution and its banking activities will be limited to its retirement plan clients. It currently services 18,500 401(k) plans.

“After careful review, we’ve determined that a significant additional investment would be required to gain scale and be competitive in retail banking,” the company said in a statement, according to American Banker. “The best approach for Nationwide and for our members is to focus our resources on positioning property [and] casualty, financial services and emerging businesses for growth.”

After establishing a trust company in 1998, Nationwide obtained a bank charter in 2006 to serve policyholders and employees. Nationwide Bank has a full-service branch in Columbus and another in nearby Dublin. It is the fifth largest in Central Ohio.

At the end of 2017, the company had $7.1 billion of assets and $4.8 billion of deposits. Its balance sheet includes roughly $2.9 billion in one- to four-family home loans and $913.8 million in auto loans.

Nationwide said it has hired an investment banker to help find a buyer for its deposits and loans, and hasn’t figured out what will happen to the 240 employees in its retail banking business.

It will likely take several months to work all of this out, with the company saying that “the timing will vary depending on how we transition retail banking operations, so workforce impacts will vary by function and by role.”

Until then, the deposits and loans will remain accessible at Nationwide Bank.

“While the bank has grown nicely, to really be competitive and relevant in the retail consumer-based banking, you probably need to be bigger and have more technology capabilities than we have today,” Mark Thresher, Nationwide CFO and chairman of the Nationwide Bank Board of Directors, told Columbus Business First. “When we evaluated that based on the other investments we’ve made in other business units, we found this is the best course.”

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