Nationwide profit update after Fairer Share Payment of £100 to 3.85m members

The gathering nine said the worth of Virgin Money, which it acquired successful October, was good supra the £2.8bn takeover price

Nationwide Building Society has announced a £2.3bn summation since snapping up rival Virgin Money, contempt seeing its profits dip owed to the declining interaction of higher involvement rates and rewarding its members with cash.

The acquisition of Virgin Money successful October for implicit the £2.8bn acquisition terms marks it arsenic the biggest merger successful UK banking since the fiscal crash. Nationwide main enforcement Debbie Crosbie highlighted that "future profits generated by Virgin Money tin present beryllium utilized for the payment of customers, alternatively than being paid to outer shareholders".

However, Nationwide faced a steep nett alteration for the half-year play ending successful September, with pre-tax profits plummeting to £568m from £989m the erstwhile year. This downturn was partially attributed to the Fairer Share Payment of £100 paid retired to 3.85 cardinal eligible members successful June and much favourable borrowing conditions and competitory savings rates offered to consumers.

Crosbie said: "The economical outlook remains uncertain, and the involvement complaint outlook means we expect to person passed highest profitability."

She besides said that low-interest rates coupled with steadiness successful existent net are bolstering user finances which mightiness boost lodging marketplace enactment and wide deposit maturation if sustained.

Meanwhile, Virgin Money has reported a surge successful profits aft implementing cost-cutting measures crossed the business. The company's statutory pre-tax nett leapt to £558m for the twelvemonth ending successful September, up from £345m the erstwhile year.

Despite halting its restructuring plans pursuing an statement to beryllium acquired by Nationwide earlier this year, Virgin Money stated it inactive managed to prevention costs of £187m implicit the past year.