Nationwide to pay 3.4m customers £100 each

Britain’s largest mortgage bank is handing over millions of loyal customers £100 each after raking in record profits.

Nationwide said 3.4 million eligible members will distribute £340 million through a new Fairer Share scheme that it hopes to repeat annually.

The building society also launched a two-year fixed-rate savings account that paid 4.75 percent interest that all 16 million customers can access.

Both benefits were announced along with full-year results showing profits jumped 39 per cent to £2.2bn as rising interest rates were cashed in. As a mutual business, Nationwide is owned by its customers, or members, who will benefit from better rates on savings, mortgages, and other products.

Chief executive Debbie Crosbie, who previously ran TSB, tried to differentiate between the way the company and the country’s banks operate – although Nationwide, like the country’s biggest lenders, has also faced criticism in recent years for it paying fat cats.

“Nationwide’s goal is to provide banking, but fairer, more rewarding and for the good of society,” she said.

“That’s why we introduced the Nationwide Fairer Share, giving even more value back to members. We are able to do this because of our financial strength and the fact that we are a construction company, not a bank, so our profits are used for the benefit of our members.

“We don’t see anyone else doing this and we think in the cost of living crisis it was really important to give people money where we could, and we think that’s going to have the most impact.”

In a further effort to differentiate Nationwide from the High Street banks, Crosbie reiterated its pledge to leave no town or city 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 during this time, and 72 since 2019, that compares to about 1,300 closings at Natwest and more than 1,000 at Barclays and Lloyds.

Crosbie said, “We believe that the industry is central to our proposition and will continue to be so.”

But as rising interest rates boosted profits — by enabling Nationwide to raise mortgage rates faster than savings rates — Crosbie warned that the economic outlook remains uncertain and households could struggle to adjust to higher borrowing costs.

About 275,000 borrowers will see their fixed-rate mortgage agreements expire in the next 12 months, Nationwide said, where they could see their monthly payments increase significantly. The group set aside £126 million to cover expected losses on loans that turn sour.

To be eligible for the £100 Fairer Share payments, customers must have a current account and savings product or a current account and mortgage with Nationwide.

Chairman Kevin Parry said the board plans to repeat the payments each year “provided they do not harm the financial strength of society.”