Nationwide has reported its strongest financial results on record.
The Swindon-headquartered building society has pledged, as a result, to hand out £340m in payments to eligible members. However, it cautioned over reduced activity in the mortgage market and subdued house prices over the rest of the year.
The organisation, which has 625 branches across the country saw its underlying pre-tax profit surge to £2.2bn in the year to April, from £1.6bn this time last year. Its total underlying income jumped to £4.7bn from £3.9bn the previous year.
The mutual lender said the "strong financial performance" has allowed it to launch the Nationwide Fairer Share Payment, where eligible members will receive £100 into their current accounts in June.
Read more: Lloyds Bank welcomes £8bn vision for transport for the South West and Wales
Nationwide said it was about rewarding members "who have the deepest banking relationships with us", and it is also introducing the Nationwide Fairer Share Bond with competitive interest rates.
Nationwide chief executive Debbie Crosbie said: "Our strategy is to increase value, offer simply brilliant service, be good for society and to become simpler and more efficient. This will ensure Nationwide's future strength and our ability to support customers and wider society today and for the long term."
Yet, Ms Crosbie said the economic outlook remains uncertain and households could struggle to adjust to higher interest payments.
She explained that "continued increases in the cost of living and higher interest rates for borrowers" putting pressure on households, has led to reduced mortgage market activity and lower house prices, which are expected to remain subdued in the second half of 2023.
She added: “Overall, our borrowers are relatively well placed to withstand challenges in the medium term, given the significant proportion of borrowing on fixed rates, and the relatively low number of borrowers who spend a high proportion of their income on debt repayments.
“However, the transition to higher interest payments is a challenge for households as they adjust their expenditure priorities. We will continue to support those borrowers who face payment difficulties.”
Read more:
- REVEALED: Top 150 businesses in Devon and Cornwall 2023
South West energy firms to pay £4m compensation for overcharging customers
Jobs set to go at Myenergi as growth slows in electric vehicle charge market
Like this story? Why not sign up to get the latest South West business news straight to your inbox.
