Virgin Money Integration Advances but Economic Uncertainty Clouds Nationwide’s Outlook

Robust Financial Performance Amid Integration

Nationwide Building Society has delivered a resilient financial performance for the six months ended 30 September 2025, reporting an underlying profit before tax of £977 million, up from £959 million in the prior comparable period. This growth reflects the successful integration of Virgin Money, acquired in October 2024, and strong momentum across Nationwide’s core mortgage and deposit businesses.

Mortgage balances increased to £280.6 billion, with the Group’s market share edging up to 16.3%. Retail deposits also grew by £5.3 billion to £266.0 billion, maintaining a steady market share of 12.2%. These figures underscore Nationwide’s continued leadership in the UK mortgage and retail banking markets, supported by competitive product offerings and a growing customer base.

Customer Satisfaction and Member Value

Customer satisfaction remains a cornerstone of Nationwide’s strategy, with the Group holding the top spot for customer satisfaction among its peers for 14 consecutive years. The acquisition of Virgin Money has further bolstered Nationwide’s appeal, with over one million net current account switchers since the launch of the Current Account Switch Service in 2013; more than three times that of its nearest competitor.

Nationwide delivered £1.2 billion in value to its members during the period, including £409 million through its third Fairer Share Payment. This commitment to member value is reflected in Nationwide’s competitive interest rates, which averaged 31% higher than the market on retail deposits.

Capital Strength and Credit Quality

The Group’s capital and liquidity positions remain robust, with a Common Equity Tier 1 (CET1) ratio of 18.4% and a leverage ratio of 5.2%, comfortably exceeding regulatory requirements. Risk-weighted assets increased by £4.9 billion, primarily due to mortgage portfolio growth and a one-off regulatory model adjustment related to Virgin Money’s mortgage models.

Credit quality remains strong despite the broader economic uncertainties. Mortgage arrears are low at 0.42%, significantly below the industry average, and impairment provisions have been prudently increased to £1.3 billion, reflecting the inclusion of Virgin Money’s lending portfolio and ongoing affordability pressures faced by borrowers.

Progress on Virgin Money Integration

Integration of Virgin Money is progressing ahead of schedule. The Group has agreed the sale of Virgin Money’s investments and pensions subsidiary to simplify its business and is on track to complete the Part VII transfer of Virgin Money’s main operating subsidiary, Clydesdale Bank PLC, into Nationwide Building Society by 2 April 2026. This transfer will legally consolidate approximately 6.6 million customers under Nationwide’s umbrella, with system migrations planned to follow over the subsequent two to three years.

Outlook Amid Economic Uncertainty

Looking ahead, Nationwide anticipates modest UK economic growth with inflation gradually returning to the Bank of England’s 2% target, prompting expected reductions in interest rates. The housing market and deposit growth have shown resilience, and the Group remains well-positioned to support customers through ongoing economic challenges. Credit quality and capital adequacy are expected to remain strong, although affordability pressures for borrowers persist.