The regulator says “the merger does not give rise to a realistic prospect of a substantial lessening of competition” across residential and landlord mortgages, as well as their credit card businesses.  

Its summary describes Nationwide as “a strong provider” of owner-occupied home loans.  

But adds that Lloyds, NatWest and Santander, across mainland Britain, and Ulster Bank and Allied Irish Bank, in Northern Ireland, “would exert a sufficient competitive constraint” on the merged business.  

The watchdog points out that a Nationwide/Virgin Money combination would be the largest supplier of buy-to-let loans by some measures, but “would still have a share of supply below 30%”.  

It says NatWest, Santander, Barclays, and some specialist lenders would provide competition in this area.  

The Competition and Markets Authority, which announced its probe at the end of May, concludes that it will not refer the merger under the Enterprise Act 2002.  

Nationwide chief executive Debbie Crosbie says: “This is another important step on the path to completing the acquisition of Virgin Money, with all the benefits for members and customers that this will bring.  

“We remain on course to receive all the necessary approvals to complete the deal in the final three months of this year.” 

In May, Virgin Money shareholders voted by an 89% majority to accept the mutual’s takeover offer. Nationwide members do not have a vote on the deal. 

The offer was a 38% premium to Virgin Money’s 159.1p closing price of pence on 6 March, the day before the deal was announced.        

Nationwide plans to terminate the Virgin brand after four years and will rebrand the bank over the following two years.