Nationwide customers are set to enjoy their own payday as the UK’s largest building society has confirmed it will pay £340m of its profits directly into customers’ accounts.
The building society has enjoyed record profits this year of £2.2bn and subject to its financial strength each year, Nationwide wants to carry on giving its customers annual distributions.
With 16.3 million building society members worldwide, there will certainly be a lot of happy people next month.
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Members will be told today (19 May) if they are eligible to receive the cash payment in June, which is equivalent to £100.
As part of Nationwide’s new 'Fairer Share' scheme, under which the payments will be made, Nationwide will also offer all members a Fairer Sharer Bond, which pays a rate of 4.75 percent.
Chief executive Debbie Crosbie said: “The fact that we’re building society, not a bank, means our profit is used for the benefit of our members.
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“That’s why we have introduced ‘Fairer Share’, which will see us return even more value back to our members.”
All Nationwide customers with a current account, mortgage or savings account are regarded as members under the building society’s cooperative model.
And the customers who are eligible for the payment in June will have a Nationwide current account, along with a savings account or mortgage.
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As the second-largest mortgage lender in the UK, Nationwide recently announced their record underlying profits of £1.6bn.
The group said it provided loans for one in seven first-time buyers last year, which helped it reach the record profits.
These financial results are the society's strongest thus far, and are more than double the numbers seen the previous year.
This year's results were also recorded during increasing mortgage demand and inflation of house prices, plus higher interest rates, which are now at their highest number in 15 years.
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Nationwide’s chief economist, Robert Gardner recently said there are ‘tentative signs of recovery’ after house prices increased by 0.5 percent in April, after falling for seven consecutive months.
At the beginning of May, Gardner said: “While annual house price growth remained negative in April at minus 2.7 per cent, there were tentative signs of a recovery, with prices rising by 0.5 per cent during the month (after taking account of seasonal effects).
“Recent Bank of England data suggests that housing market activity remained subdued in the opening months of 2023, with the number of mortgages approved for house purchase in February nearly 40 per cent below the level prevailing a year ago, and around a third lower than pre-pandemic levels.
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“However, in recent months industry data on mortgage applications point to signs of a pick-up."
The average price for a house in the UK in April was £260,441, Nationwide said.
Gregory Robinson