Nationwide to dish out £340m to members after record financial results

Nationwide Building Society has reported its strongest financial results on record and said it will be handing out £340 million in payments to eligible members.

But it cautioned over reduced activity in the mortgage market and subdued house prices over the rest of the year.

The mutual lender saw its underlying pre-tax profit surge to £2.2 billon in the year to April, from £1.6 billion this time last year.

Nationwide's total underlying income jumped to £4.7 billion from £3.9 billion the previous year.

The "strong financial performance" has allowed it to launch the Nationwide Fairer Share Payment, where eligible members will receive £100 into their current accounts in June.

Nationwide said it was about rewarding members "who have the deepest banking relationships with us", and it is also introducing the Nationwide Fairer Share Bond with competitive interest rates.

But chief executive Debbie Crosbie said the economic outlook remains uncertain and households could struggle to adjust to higher interest payments.

She said the squeeze on household incomes has led to "reduced mortgage market activity and lower house prices, which are expected to remain subdued in the second half of 2023".

She added: "Overall, our borrowers are relatively well placed to withstand challenges in the medium term, given the significant proportion of borrowing on fixed rates, and the relatively low number of borrowers who spend a high proportion of their income on debt repayments.

"However, the transition to higher interest payments is a challenge for households as they adjust their expenditure priorities. We will continue to support those borrowers who face payment difficulties."

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