Nationwide Building Society (NBS) H2 2025 earnings summary

Executive summary

• Achieved record growth and financial performance, with highest ever member value returned and record organic growth in mortgages and retail deposits.

• Completed acquisition of Virgin Money, diversifying the business, expanding into SME banking, and enhancing business banking capabilities.

• Maintained number one customer satisfaction for the 13th consecutive year and received Which? Banking Brand of the Year 2025.

• Integration of Virgin Money progressing well, with improved service metrics and lower-than-expected integration costs.

• Continued investment in both branch and digital services, supporting strong customer acquisition and retention.

Financial highlights

• Statutory profit reached a record £2.3bn, up from £1.8bn, with underlying profit at £2.0bn and net interest income of £5.0bn.

• Record net mortgage lending of £15.9bn and organic retail deposit growth of £14bn.

• Member reward payments totaled £1bn, with record member value of £2.8bn including Big Nationwide Thank You and Fairer Share payments.

• Group CET1 ratio at 19.1% and leverage ratio at 5.2%, remaining peer-leading despite acquisition impact.

• Cost of risk increased to 7bps, reflecting portfolio growth and Virgin Money inclusion.

Outlook and guidance

• Expect heightened competition in both mortgage and deposit markets, with ongoing margin compression.

• Net interest margin expected to be stable, with headwinds from competition offset by structural hedge tailwinds.

• Base case scenario assumes a rise in unemployment and 1.9% house price increase in 2025; weighted scenarios indicate a 6% fall in house prices by early 2027.

• Continued focus on cost discipline, aiming to keep group BAU cost growth within inflation.

• Integration of Virgin Money to drive further synergies and investment, with more detail at interim results.