Nationwide Building Society has reported a decline in its annual profits following its acquisition of Virgin Money, while also announcing plans to distribute approximately £440 million to its members next month.
Financial Performance
The building society posted a pre-tax profit of £1.49 billion for the year ending March 31, a significant drop from the £2.3 billion recorded in the previous year. Nationwide attributed last year's higher earnings to a one-off gain from the Virgin Money acquisition, which is currently being integrated into the group. The Virgin Money brand is expected to be phased out, with customers transitioning to Nationwide and the first branch rebranding anticipated in 2028.
The lower profit figure also accounts for the latest 'Fairer Share' payment, the fourth since the profit-sharing initiative began. Around 4.4 million members will receive £100 in June. Nationwide stated that approximately £1.5 billion will have been returned to members since the scheme's inception in 2023, with the aim of making annual payments subject to the group's financial performance.
Mortgage and Deposit Trends
Net mortgage lending fell to £10.3 billion from £15.9 billion the prior year, although Nationwide maintained its market-leading position. The group noted that March 2025, which fell within the previous financial year, saw a surge of home buyers locking in deals ahead of changes to stamp duty relief in April. Mortgage rates increased sharply in March this year, and hundreds of deals were withdrawn following the onset of the US-Israeli war with Iran.
Nationwide explained that it had to raise mortgage rates 'by necessity' due to rising market swap rates, which are used to price mortgages. Muir Matheson, Nationwide's chief finance officer, commented: 'I would say though that we haven't used that as an opportunity for profiteering or anything like that. We always try to give the best possible rates in that context to our members.'
Deposit Growth
A strong season for ISAs and approximately one million new personal current account openings helped lift total customer deposits by £10.1 billion in the latest year. Student current account openings doubled compared to the previous year, with Nationwide capturing 43% of the entire market, having incentivised students with perks such as cashback and takeaway vouchers.
