Nationwide’s £2.9 billion acquisition of Virgin Money is expected to be completed next month after getting approval from both the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).

The building society’s offer to buy the banking and financial services firm was first confirmed in March of this year.

Kevin Parry, Nationwide’s chairman, stated at the time that if the acquisition were to go through, it would “accelerate our strategy and create a stronger and more diverse business that is better placed to deliver financial value to our members, both now and in the future.”

The shareholders of Virgin Money then accepted Nationwide’s offer in May.

Now, with the greenlight from the FCA and PRA, which are required for this acquisition, the next stage is a court hearing to sanction the transaction. This is expected to take place on 27 September, with the purchase expected to be completed on 1 October, Nationwide said.

Upon completion of the purchase, it will see the second-largest mortgage lender in the UK being created. As it stands, Lloyds Banking Group is the country’s biggest lender in this area.

According to the building society, the two businesses will gradually be brought together, with Virgin Money joining Nationwide as a wholly-owned subsidiary with a separate banking license, board, and management team.

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Commenting on the deal in an update today, Nationwide said: “This deal means more of the profits generated by Virgin Money can be invested to improve satisfaction and services for customers, instead of being paid to shareholders. It will also mean more investment can be made in Virgin Money’s business banking services.

“For the first time in the UK, a successful business bank will be part of a large mutual, offering real choice for the country’s small and medium-sized businesses.

“All of this improves Nationwide’s financial strength and our options for increasing the benefits and incentives for our members.”