Nationwide, the world’s largest building society, has announced plans to pay £340 million across its members’ accounts.
New chief executive Debbie Crosbie said on Friday that the decision was made to ensure equal status after a rise in deposits and interest rates increased profits to record highs.
As part of the “Fairer Share” deal ,the bank has opted to distribute funds directly into accounts rather than take previous routes of giving members better rates on savings, loans and mortgages.
Nationwide reported a 40 per cent rise in annual pre-tax profits to reach a company record of £2.2 billion - exceeding even the previous record high of £1.6 billion from last year.
Ms Crosbie said: “We don’t see anyone else doing this, as such, and we think, in the cost of living crisis, it was really important to get people cash where we could, and we think it will have the most impact.
“I am firmly committed and believe there is no more relevant time to be mutual. There is no way the banks can compete with us in the value we are returning to members.”
This is what the initiative is worth and what it means for you.
Who is eligible?
The payout will benefit Nationwide’s 3.4 million eligible customers.
Ms Crosbie admitted members might come to expect a payout each year, even when the society has not done so well.
“We understand that there is an expectation now, but we want to do it every year,” she said.
John Lewis, a partnership structured in a similar way, has had to suspend its bonus payments to staff while the business struggles.
How much will they get?
Anyone with a current account is set to receive £100 into it in June.
Members will also be offered two-year savings bonds that pay a 4.75 per cent interest rate.
