Nationwide Building Society will hand £100 to more than four million members following what it described as an “outstanding twelve months” of performance, capped by its takeover of Virgin Money and a surge in mortgage lending.
The £410 million “Fairer Share” payout — the third consecutive annual bonus to qualifying members — was revealed in Nationwide’s full-year results, which showed profits rising to £2.3 billion, up from £1.8 billion the year before.
The member-owned mutual said the bonus reflects its commitment to rewarding customer loyalty and passing on value, with £1.8 billion of the £2.8 billion total returned to members delivered through competitive savings and mortgage rates, and £1 billion distributed directly via cash bonuses.
The record performance was helped by its £2.9 billion acquisition of Virgin Money, which completed in October, and a boom in mortgage activity. Net mortgage lending leapt to £15.9 billion, up from £2.6 billion the previous year, driven by a rush of homebuyers ahead of the end of a temporary stamp duty discount in March.
March was Nationwide’s busiest-ever month for mortgage completions, with over 30,000 property purchases finalised.
Debbie Crosbie, the society’s chief executive, said the strong performance gave the mutual the financial firepower to both reward members and pursue strategic growth: “We’ve had an outstanding twelve months. This is the benefit of mutuality — we can reinvest our profits for the benefit of our members.”
Crosbie’s bold move to acquire Virgin Money last year saw Nationwide leapfrog NatWest to become the UK’s second-largest mortgage lender, behind Lloyds Banking Group. The deal also reunited Crosbie with a business where she spent over two decades earlier in her career.
To thank members for enabling the takeover, Nationwide also made a one-off £50 payment to 12 million members last month, totalling £615 million — on top of the £385 million Fairer Share payout in 2023 and £344 million in 2022.
The Virgin Money brand will remain separate for now, but Crosbie signalled that future integration is likely to deliver cost savings and synergies, particularly around funding, IT, and third-party costs. “We don’t expect any significant changes in staff levels in the short- to medium-term,” she added.
Despite the March stamp duty deadline passing, the building society says demand for mortgages remains robust. “We thought there would be a bit of a cliff edge, but we haven’t seen it,” said finance chief Muir Mathieson.
ISA warning: reforms could impact mortgage costs
Crosbie also warned that potential government reforms to the Isa system — particularly any cap on cash Isas — could make mortgage borrowing more expensive, especially for smaller lenders.
The Treasury is said to be considering changes that would cut the annual £20,000 allowance for cash Isas in a bid to steer savers toward equity-based stocks and shares Isas and revive the London Stock Exchange.
Crosbie cautioned that such a move would hit building societies that rely on cash savings to fund mortgage lending. “Cash Isas are a very important source of funding,” she said. “Reducing the allowance could raise the cost of mortgage lending, particularly for smaller societies.”
She also stressed that investing in equities is not suitable for all savers: “The customer research that we have done has shown that the large majority of people don’t have an appetite for equity investments. Stocks and shares may not be appropriate for retirees or younger people saving for their first home.”
Nationwide, which only offers cash Isas, said it has seen a surge in new deposits in recent weeks amid speculation about changes to the Isa regime. “It’s been a very busy period,” said Crosbie.
Read more:
Nationwide rewards members with £100 payout after record profits and Virgin Money deal