Members across the country are expecting a payout bonus amid the Virgin Money takeover windfall
Members nationwide appear set for a payout bonus after the building society revealed a £2.3 billion windfall from its Virgin Money takeover.
Chief executive Debbie Crosbie told the Mail it is now ‘well positioned’ to repeat its previous policy of making £100 ‘fairer share’ payments to eligible customers.
And she did not rule out the prospect of another one-off payment to reward customers after the takeover.
When asked by the Mail about such a move, Crosbie said: ‘We’re not ready to make those announcements yet.
“But we’re confident that this year we can do something that goes beyond what you would normally expect.”
However, Virgin Money customers are not eligible for the fairer share payment.
Responsible: Debbie Crosbie is the CEO of Nationwide
The comments came as Nationwide confirmed it has made a big profit on its £2.8 billion purchase of Virgin – as first reported by The Mail on Sunday. The deal was completed last month.
Yet the price tag was so low that Nationwide paid far less for Virgin’s assets than they are now thought to be worth.
The resulting £2.3 billion financial boost was revealed as Nationwide – Britain’s largest lender – published half-year results yesterday.
They posted record mortgage lending and savings increases in the six months to the end of September, but also saw profits fall 43 percent to £568 million.
Nationwide said this was mainly due to falling interest rates – as higher interest rates usually mean bigger profits for lenders – and the “choice to offer competitive rates” to customers, putting pressure on margins.
A spokesperson for Nationwide said: ‘The economic outlook remains uncertain, and the interest rate outlook means we expect to have exceeded peak profitability.’
However, the boost from the Virgin deal has given bosses confidence that the building society can once again offer member benefits at the end of the financial year in March 2025.
It handed out £100 payments this year and last, alongside other offers such as high-yield savings bonds.
Speaking about the prospect of another “fairer share” payment, Crosbie said: “While it is always subject to board approval, we are well positioned to do so.”
Previous years’ payouts only apply to those who maintain both a checking account and a qualifying mortgage or savings product.
This year it paid out £385m to 3.85m customers, up from £344m the year before.
Virgin’s integration will take place over several years, and there are no plans to phase out the name anytime soon.
John Cronin, an analyst at SeaPoint Insights, said the gain on the acquisition announced yesterday was “much higher than expected when the deal was first announced.”
He added that the sharp decline in profits was “not unexpected due to official interest rate changes during the period.”
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