Britain’s Nationwide Building Society has today reported a 30% rise in annual profit as it incorporated the takeover of rival Virgin Money, which made it the country’s second biggest mortgage lender.
Nationwide said its statutory profit before tax for the financial year ended March 31 rose to £2.3 billion from £1.8 billion the year before as it recorded its highest ever year for mortgage lending and retail customer balances.
Nationwide, unlike the big shareholder-owned banks it competes with, does not prioritise profit but instead measures how much it pays out to its members in beneficial rates and direct cash handouts.
That measure of member value grew to a record £2.8 billion for the financial year, Nationwide said, including a one-off payment of £615m to members for supporting its takeover of Virgin Money.
Nationwide’s robust results came despite a muted outlook for Britain’s economy, as the lender said resilience in customers’ real earnings and lower interest rates supported the mortgage market and growth in its deposits.
The lender has not yet decided on how many jobs it might cut as it integrates Virgin Money fully into its business, chief executive Debbie Crosbie told Reuters.
“We’ve been pleased with the synergies in the areas that don’t affect people, such as in third party suppliers, IT and infrastructure… so we’re not going to make any announcements in the short term on people changes,” she said.
Nationwide said it will also build on Virgin Money’s business banking book, pushing back into a market which it abandoned plans to enter in 2020, during the Covid-19 pandemic when rock-bottom interest rates made it financially unappealing.
