Nationwide Building Society (NBS) H1 2025 earnings summary

Executive summary

• Achieved record H1 growth in mortgages and retail deposits, with net mortgage lending of £6.3bn and deposit growth of £8.3bn, increasing market share and customer satisfaction.

• Completed the acquisition of Virgin Money, making the group the UK's second largest retail banking institution and provider of mortgages and retail deposits.

• Delivered over £1.3bn in value to members, including £950m in financial benefit and a £385m Fairer Share payment.

• Maintained No. 1 customer satisfaction in peer group for over 12 years and expanded social impact initiatives, including the Fairer Futures strategy and dementia clinics.

Financial highlights

• Net interest income fell 11% year-over-year to £2,076m; net interest margin declined to 1.50% from 1.66% year-over-year, but improved 4bps sequentially.

• Underlying profit before tax fell 24% to £959m, and statutory profit before tax dropped to £568m, mainly due to lower net interest margin and competitive pricing.

• Record H1 mortgage net lending of £6.3bn and retail deposit growth of £8.3bn.

• Underlying costs rose 3.5% to £1,154m, including £26m one-off Virgin Money acquisition costs.

• Member Financial Benefit increased to £950m from £885m year-over-year.

Outlook and guidance

• Economic outlook remains uncertain, with expectations of having passed peak profitability; lower interest rates and resilient real earnings are expected to support consumer finances and housing market activity.

• Deposit margins expected to decrease as base rates fall, with timing lags impacting customer rates; NIM expected to broadly continue current trends.

• Base case scenario assumes rising unemployment and modest house price growth; weighted average scenario indicates a 7% fall in house prices by early 2027.

• Integration of Virgin Money will be gradual, with full group financials to be reported in May 2025 and future profits retained for customer benefit.