Nationwide announces £340m member reward scheme following 40% rise in profit

Nationwide announces £340m member reward scheme following 40% rise in profit

In a move for customer rewards, Nationwide Building Society has announced a significant redistribution of profit to its customers, strengthening the appeal of its mutual structure.

This action follows a 40% rise in annual profit, amounting to £2.2 billion, resulting from a succession of interest rate increases.

The financial institution is embarking on a programme called Nationwide Fairer Share, underpinning its commitment to its 16 million members. Under the scheme, members with the deepest relationships will receive £100 each, resulting in a total payment of £340 million to eligible members holding both a qualifying current account and a qualifying savings or mortgage product.

The payment will automatically be transferred into their Nationwide current accounts in June, provided they held their qualifying products on 31 March 2023.

To facilitate this profit-sharing initiative, Nationwide is launching the Nationwide Fairer Share Payment and the Nationwide Fairer Share Bond. The bond will offer an attractive 4.75% interest rate over a two-year period and can be opened in branch or via Nationwide’s online banking platforms.

This move builds on Nationwide’s previous success in delivering benefits to its members. In the last fiscal year, it returned over £1bn to members through better rates and incentives, leading to a substantial £9.1bn growth in deposits.

Debbie Crosbie, chief executive of Nationwide Building Society, said: “Nationwide’s purpose is to offer banking, but fairer, more rewarding, and for the good of society. That’s why we have introduced the Nationwide Fairer Share, which will see us return even more value back to members.

“We are able to do this because of our financial strength and the fact we’re a building society, not a bank, so our profit is used for our members’ benefit. It’s part of our enduring commitment to rewarding our members.”

In addition to monetary benefits, Nationwide continues to invest heavily in its services. It has committed £180m towards enhancing payments, digital services, and branches, promising not to vacate any town or city it serves until at least 2024. The Society’s commitment to customer service excellence is reflected in a high branch satisfaction score of 87.1% for the last financial year.

Alongside, Nationwide is making substantial investments to address cost-of-living challenges, recently committing £100m and introducing cashback on supermarket shopping, benefiting five million customers.

Despite this positive news, Nationwide remains cautious in the face of the UK’s challenging economic outlook. The society has allocated £126m as a reserve to cover potential defaulted loans, demonstrating prudence in its forward planning.

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