Nationwide Building Society will distribute £100 each to more than four million members following what it called an “outstanding twelve months” of performance, bolstered by a surge in mortgage lending and its landmark takeover of Virgin Money.
The £410 million “Fairer Share” bonus, revealed in the mutual’s annual results, marks the third consecutive year of cash payouts to qualifying members. The move comes as Nationwide reported pre-tax profits of £2.3 billion, up from £1.8 billion the previous year.
As a member-owned institution, Nationwide said it is committed to sharing value with its customers. Of the £2.8 billion returned to members over the past year, £1.8 billion came through competitive savings and mortgage rates, while £1 billion was distributed via direct cash bonuses.
“This is the benefit of mutuality — we can reinvest our profits for the benefit of our members,” said Debbie Crosbie, Chief Executive of Nationwide. “We’ve had an outstanding twelve months.”
Nationwide’s acquisition of Virgin Money for £2.9 billion, completed in October, was a key driver of growth. The deal propelled the mutual past NatWest to become the UK’s second-largest mortgage lender, trailing only Lloyds Banking Group. The acquisition also marked a return to familiar territory for Crosbie, who previously spent over two decades at Virgin Money.
Mortgage activity played a central role in Nationwide’s success, with net lending soaring to £15.9 billion, up from just £2.6 billion the previous year. March saw a record 30,000 mortgage completions, as buyers rushed to finalise deals before the end of a temporary stamp duty discount.
Last month, Nationwide also issued a separate one-off £50 payment to 12 million members, in recognition of their role in enabling the Virgin Money takeover. That payment, which cost the society £615 million, came in addition to the £385 million Fairer Share bonus in 2023 and £344 million the year before.
Looking ahead, Crosbie said the Virgin Money brand would remain for now, though integration efforts are expected to yield cost savings in areas such as IT and third-party services.
However, Crosbie also sounded a note of caution over potential government changes to the cash ISA system. She warned that a reduction in the £20,000 tax-free allowance — currently under review by the Treasury — could increase the cost of mortgage lending, particularly for smaller lenders that rely heavily on cash savings for funding.
“Cash ISAs are a very important source of funding,” she said. “Reducing the allowance could raise the cost of mortgage lending.”
Despite concerns over tax reform and a cooling housing market, Nationwide remains optimistic. “We thought there would be a bit of a cliff edge [after the stamp duty change], but we haven’t seen it,” said Finance Director Muir Mathieson.
