Nationwide’s £100 payouts to customers after profits soar
NATIONWIDE is handing £340million to customers after notching up a record set of results.
Britain’s biggest building society saw profits rocket 40 per cent from £1.6billion to £2.2billon in the year to April.
The bumper numbers prompted a Fairer Share Payment, which means eligible members will receive £100 in their current accounts next month.
Nationwide said it wanted to reward members “who have the deepest banking relationships with us”.Yesterday saw it also launch a Fairer Share Bond, paying a rate of 4.75 per cent and available to all 16 million members.
Chief executive Debbie Crosbie warned the economic outlook remained uncertain and house- holds could struggle to adjust to higher interest payments on mortgages and loans.
She said the squeeze on household incomes had led to “reduced mortgage market activity and lower house prices which are expected to remain subdued in the second half of 2023”.
Ms Crosbie added: “Overall, our borrowers are relatively well-placed to withstand challenges in the medium term, given the significant proportion of borrowing on fixed rates, and the relatively low number of borrowers who spend a high proportion of their income on debt repayments. However, the transition to higher interest payments is a challenge for households as they adjust their expenditure priorities.”
And she pledged: “We will continue to support those borrowers who face payment difficulties.”
Over the last year, Nationwide received £9.1billion deposits in savings accounts – with £6billion of that in the second six months.
Its mortgage book grew to £201.7billion, but market share fell from 12.4 to 12.2 per cent “in a highly competitive environment”.
Victoria Scholar, of Interactive Investor, said Nationwide had “benefited from the rising rate environment, allowing it to earn more on lending products such as mortgages, which have become significantly more expensive.
“However, the macro-economic headwinds of sluggish growth and rampant inflation raise the risk of loans turning sour, forcing Nationwide to up its provisions in preparation.”