Nationwide Building Society (NBS) H2 2024 earnings summary

Executive summary

• Delivered £2,194m in Fairer Share and member financial benefit, up from £1,055m in FY 2022/23; engaged customers reached 3.53m.

• Acquisition plans for Virgin Money aim to broaden services and accelerate strategy; shareholders voted in favour, with completion subject to regulatory permissions.

Financial highlights

• FY 2023/24 total income was £4,664m, broadly flat YoY; underlying profit was £2,003m, down 10%, and statutory profit was £1,776m, down 20%.

• Net interest income was £4,450m, down 1%; net other income rose 22% to £214m. Costs rose 4% to £2,422m, while loan impairments fell 11% to £112m.

• Statutory profit included a £344m Fairer Share Payment, £117m of gains from derivatives and hedge accounting, and £127m of provisions for liabilities and charges.

• Excluding the Bank of England levy recognized through income in the prior period, costs increased 2.7%; total costs rose 4.3%, including a £36m levy charge for 2024/25.

Outlook and guidance

• The acquisition is expected to create a business with approximately £366bn of assets; integration is planned gradually over multiple years, with an 18-month post-completion review.

• Acquisition funding from surplus capital reserves is expected to leave the CET1 ratio peer-leading and leverage comfortably above regulatory requirements; pro forma ratios are illustrative and subject to change.

• Plans call for £7–9bn sterling-equivalent wholesale issuance in 2024/25; £1.5bn had been issued after 4 April 2024.

• Draft Basel 3.1 rules are estimated to reduce the CET1 ratio to a low-to-mid-20% range on a pro forma end-point basis; leverage is expected to remain the binding Tier 1 constraint in the medium term.