Nationwide to pay 3.4m customers £100 each
After building society’s profits jump 39pc to £2.2bn...
BRITAIN’S biggest building society is handing millions of loyal customers £100 each after raking in record profits.
Nationwide said 3.4m eligible members will split £340m through a new Fairer Share scheme that it hopes to repeat annually.
The building society also launched a two-year fixed rate savings account paying 4.75pc interest that all 16m of its customers can access.
Both perks were announced alongside annual results showing profits jumped 39pc to £2.2bn as it cashed in on rising interest rates. As a mutual, Nationwide is owned by its customers, or members, who stand to benefit from profits through better rates on savings, mortgages and other products.
Chief executive Debbie Crosbie, who previously ran TSB, sought to draw a distinction between the way it and the country’s banks operate – though like the country’s biggest lenders, Nationwide has also been criticised over fat cat pay in recent years.
‘Nationwide’s purpose is to offer banking, but fairer, more rewarding, and for the good of society,’ she said.
‘That’s why we have introduced the Nationwide Fairer Share, which will see us return even more value back to members. We are able to do this because of our financial strength and the fact we’re a building society, not a bank, so our profit is used for our members’ benefit.
‘We don’t see anyone else doing this and we think, in the cost-of-living crisis, it was really important to get people cash where we could, and we think it will have the most impact.’
In a further bid to differentiate Nationwide from the High Street banks, Crosbie reiterated the pledge to not leave any town or city in which it is based without a branch until at least 2024.
Banks and building societies have closed more than 5,600 branches since 2015, according to consumer group Which? And while Nationwide has closed 95 in this time, and 72 since 2019, that compares with around 1,300 closures at Natwest and more than 1,000 at Barclays and Lloyds.
Crosbie said: ‘ We believe the branch is at the centre of our proposition and it will remain so.’
But while rising interest rates boosted profits – by allowing Nationwide to raise mortgage rates faster than savings rates – Crosbie warned the economic outlook remains uncertain and households could struggle to adjust to raised borrowing costs.
Some 275,000 borrowers will see their fixed-rate mortgage deals expire over the next 12 months, Nationwide said, where they could see their monthly payments go up significantly. The group put aside £126m to cover expected losses from loans that turn sour.
To qualify for the £100 Fairer Share payments, customers must have a current account and a savings product or a current account and a mortgage with Nationwide.
Chairman Kevin Parry said the board intends to repeat the payments every year ‘provided they would not be detrimental to the financial strength of the society’.