Nationwide to pay customers £100 loyalty bonus

Nationwide

Nationwide is handing a £100 bonus to members as the building society seeks to show it is different to “big banks”.

The mutual is to spend £344m on the payout under its Fairer Share scheme, which is intended to reward customers for their loyalty.

It unveiled the plan as profits dropped by nearly 20pc to £1.8bn from £2.2bn last year. This was partly driven by a previous bonus payout to 3.4 million eligible members last June.

Chief executive Debbie Crosbie said the bonus scheme represented the “highest ever member value”.

It follows an advertising campaign starring Dominic West in which Nationwide mocks traditional banks for closing branches and treating customers badly.

Nationwide's Dominic West advert was banned for misleading customers over branch closures

Ms Crosbie is also launching an exclusive bond for eligible members which pays 5.5pc, and is seeking to lure more customers to open current accounts with a £200 sign-on bonus.

She said consumer demand has held up despite the difficult economic environment.

Ms Crosbie said: “We’ve been really pleased with how robust the customers in our society have been. We’ve seen arrears remain low, a very slight uptick, but we’ve seen people continuing to spend.

“We’ve seen things perform better and more robustly than was expected.”

The group differs from other high street lenders as it has members who own the mutual rather than shareholders.

Nationwide unveiled a £2.9bn deal to buy high street lender Virgin Money last year. It plans to absorb the group into its mutual structure over the next few years.

The deal was voted through by Virgin Money shareholders on Wednesday, but members will not be asked to vote on the takeover. Nationwide said building society rules meant it did not need to seek their approval.

A petition demanding a vote has been signed by around 5,000 Nationwide customers.

Ms Crosbie said the majority of members were “very happy” with the deal.

She said the building society has written to its 16 million members twice to keep them informed about the Virgin takeover.

“We’ve seen really limited demand in our customer member base for a vote,” she said.

“Our customers and our members are much more interested in things like our brand promise and the value that they get from our products and services.

“There’s no requirements for a vote under the building society rules or under the internal governance rules and the large majority of our members are very happy with that.”

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