Nationwide Building Society has posted a 30% jump in annual profits after an “outstanding” year that saw it complete the takeover of Virgin Money.
The mutual reported pre-tax profits of £2.3 billion for the year to March 31, up from £1.8 billion the previous year, which came despite it handing out a record £2.8 billion in value to members including £1 billion in rewards.
Nationwide announced on Thursday it would distribute its third Fairer Share payout to eligible members next month, working out at £100 each.
Last year, it paid out £385 million to 3.85 million customers, while members also benefited from a one-off £615 million reward as part of the “The Big Nationwide Thank You”.
On an underlying basis, pre-tax profits fell to £1.9 billion from £2 billion as Nationwide said it focused on offering competitive interest rates to customers.
Debbie Crosbie, group chief executive of Nationwide Building Society, said: “Nationwide has had an outstanding twelve months.
“We returned a record £2.8 billion in value to our members and recorded our highest ever year for growth in mortgage lending and retail deposit balances.”
She added: “The Virgin Money performance was strong in the six months since our acquisition, with improvements in customer service and a return to growth in mortgage lending.”
The firm completed the £2.9 billion takeover of Virgin Money last year, which has seen it become the UK’s second largest mortgages and savings provider.
The group said integration of the acquisition was “progressing well”.
Nationwide said it was continuing to run the two businesses separately initially after the acquisition and had no plans for job cuts in the short-term.
But Ms Crosbie said it was “too early to say” what impact there would be on staff of the combined group further out as it integrates the businesses.
“Every business always reviews its workforce and we’ll continue to do that on an ongoing basis, but it’s too early to say if there’ll be an impact on the broader workforce,” she said.
She also signalled Nationwide would keep Virgin Money’s Newcastle headquarters, with Ms Crosbie saying “the current footprint that we have will remain the same”.
Virgin Money’s figures showed it notched up a record £15.5 billion of net lending (new lending less redemptions) over the year, while retail savings balances grew by 35% to £260.7 billion.
Its interest rates on retail deposits were on average 30% higher than the market, according to the group.
It is pencilling in modest growth in the wider UK economy of 1.4% this year and said borrowers remain resilient.
“The global economic outlook remains highly uncertain, but UK households and the UK-focused businesses we support appear generally well placed for potential shocks,” it said.
This article was written by Holly Williams and PA Business Editor from Press Association and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.