Nationwide's deal today with the Derbyshire and Cheshire building societies might be seen as a triumph for mutuality over public ownership.

While quoted banks beg shareholders for extra cash, Nationwide rescues two smaller rivals in a way that validates its strategy and broadens its asset base.

Britain's biggest building society denies that it was encouraged to do the deals by the financial regulator. But its agreement to merge with the Derbyshire and Chesire demonstrates how neatly such things can be arranged when irritating details such as an exchange of stock and cash and the approval of shareholders do not exist. It is Nationwide's mutual status that has enabled it to afford such deals.

While Northern Rock was teetering on the brink of collapse and other high street rivals were announcing multi-billion pound writedowns on structured credit products, Nationwide also had queues outside its doors — to put money in. Customers were attracted by the staid and stable air of the building society.

Expect other small building societies to be knocking on Nationwide's doors.

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