Nationwide Building Society (NBS) H1 2026 earnings summary

Executive summary

• Achieved market-leading growth in mortgages and retail deposits, with net mortgage lending of £4.7bn and retail deposit increase of £5.3bn, maintaining strong market shares and a 46% share of student account openings.

• Underlying profit before tax increased by 2% year-on-year to £977m, supported by the Virgin Money acquisition and strong operational performance.

• Delivered £1.2bn in value to members, including £409m through the Fairer Share Payment and £780m in member financial benefit.

• Integration of Virgin Money is ahead of plan, with streamlined governance, sale of Virgin Money Investments agreed, and legal transfer of assets set for April 2026.

• Recognized for customer satisfaction and brand leadership, including Which banking brand of the year and industry-leading ESG ratings.

Financial highlights

• Net interest income rose to £2,967m, with total income at £3,112m and underlying profit before tax at £977m; statutory profit before tax was £486m, reflecting the impact of member reward payments.

• Mortgage net lending reached £4.7bn, with balances at £280.6bn; retail deposit balances increased to £266.0bn, supported by strong ISA and current account growth.

• Net interest margin stable at 1.58%, with deposit rates averaging 31% higher than the market.

• Underlying costs grew less than inflation, with £43m in integration costs and £81m in acquisition-related costs.

• Net underlying group impairment charge was £146m, a 10bps annualized cost of risk.

Outlook and guidance

• Integration and migration of Virgin Money customers and systems to continue through 2026-2028, with most migration to end-state platforms planned within two to three years after Part 7 completion.

• NIM expected to remain broadly stable as headwinds and tailwinds net out; deposit margins likely to compress as base rates fall.

• Base case scenario models gradual reduction in Bank rate to 3.5% during 2026 and steady house price growth, but weighted scenario analysis highlights sensitivity to house price declines and unemployment increases.

• Expect integration expenditure to rise over the next 18 months, then decline, with synergies above original expectations.

• Downside scenarios remain 45% weighted, with provision sensitivity to severe downside.