·Finance Reporter, Yahoo Finance UK
Fri, 19 May 2023 at 9:44 am BST
Nationwide (NBS.L) has revealed a £340m ($421.6m) payout to its customer base on the back of a 40% hike in annual profits.
Eligible members will get £100 each, according to Nationwide, which also announced a new 4.75% paying two-year fixed rate savings account.
The building society’s members — of whom there are 16.3 million worldwide — will be told on Friday if they are eligible to receive the cash payment in June.
As a building society, Nationwide is owned by its customer members, who are meant to benefit from profits through better rates on savings, mortgages and other products.
Nationwide reported a 40% jump in annual pre-tax profits to £2.2bn — a record high — up from £1.6bn a year earlier. The building society benefited from the rise in UK interest rates, which have climbed to 4.5% over the past year and allowed lenders to charge customers more for loans and mortgages.
Chief executive Debbie Crosbie said: “We have delivered a strong financial performance by providing banking that is fairer, more rewarding and for the good of society.”
Crosbie added that the transition to higher interest rates would be a strain for many households. “Nationwide remains well positioned to use its financial strength to continue to support its customers through the challenges ahead,” she said.
The building society set aside £108m for credit losses, compared to the £34m it released the previous year.
Across the year Nationwide said the financial benefit to members has increased to over £1bn, up from £325m last year.
It said this was “supported by our competitive mortgage and savings products; as we have passed a greater proportion of interest rate rises to savers than the market average.”
Reflecting the higher rates, its share of the deposit market grew to 9.6%, up from 9.4% last year, equalling a balance growth of £9.1bn.
The building society is the second-largest mortgage lender in the UK, and claimed to provide loans for one in seven first-time buyers last year.