Nationwide Building Society Performance

Our acquisition of Virgin Money will enable us to bring the benefits of mutuality to more people in the UK.

As we integrate the Virgin Money business carefully over time, we will be able to increase further the impact we have in communities across the UK and the benefits we offer to members and customers.

Our acquisition of Virgin Money, which completed on 1 October 2024, has grown and diversified our business, and will enable us to deliver even greater value for our customers.

We are making good progress with our integration plans and significant improvements are being made to support our customers at Virgin Money.

We are preparing to transfer the assets and liabilities of Virgin Money's main operating subsidiary, Clydesdale Bank PLC, into Nationwide, which we expect to complete in 2026/275.

Our acquisition of Virgin Money on 1 October 2024 has further strengthened our business:

We are an inclusive organisation that values the diversity of the communities we serve.

I am pleased that our diversity and inclusion activity was again recognised in the Financial Times’ list of Europe’s Diversity Leaders 20256, where Nationwide ranked fifth out of 850 organisations.

By 2028, our people will better reflect the wider society that we represent.

We achieved five of our seven diversity measure targets for March 2025, with improvements seen across all measures in the year, except for the LGBTQ+ leadership population.

We will utilise our data and insights to identify where focus and action are needed to design inclusion into our processes, policies and practices.

It reviews the Board’s governance arrangements, ensuring they are consistent with best practice, and oversees the implementation of the inclusion and diversity (I&D) strategy and objectives for the Nationwide sub-group.

In June 2024, we launched Nationwide Fairer Futures, to help tackle three of the biggest issues we see in society today – youth homelessness, families living in poverty and people living with dementia.

In April 2025, we added a fourth partnership with The Royal Marsden Cancer Charity, to additionally focus on better outcomes and fairer futures for those experiencing cancer.

Through our partnership with Dementia UK, we are funding 30 Admiral Nurse roles and have now hosted 1,400 dementia clinics in more than 120 of our branches, offering free, specialist support and advice to those impacted by dementia.

The Board approved the Nationwide Fairer Futures strategy and the appointment of our initial three charity partnerships as part of this.

Through the year, the Board received updates on progress against our Nationwide Fairer Futures strategy.

Following the successful launch of the Blueprint for a modern mutual in 2023, the Board agreed this presented an opportunity to refresh the social investment strategy, which had been focussed on housing need.

Since the general election, we have continued to engage with political stakeholders, and have focused on building links with the new Government and MPs.

Our Group Chief Executive Officer attended the Government’s International Investment Summit.

We also held local MP visits at over 50 of our branches.

Following our acquisition of Virgin Money, which is headquartered in Glasgow, we have sought to enhance our engagement with the Scottish Government and MSPs.

Listening to and engaging regularly with our stakeholders is fundamental to the way we do business, and it ensures we operate in a balanced and responsible way, both in the short and longer term.

We are keen to understand our customers’ views and what is important to them.

Regulators and policymakers oversee our activities and undertake consultations and policy reform.

We aim for the highest possible standards of regulatory compliance to protect and enhance the integrity of the UK financial system and ensure good outcomes for our customers.

We engaged effectively with regulators and policymakers through the year to influence them on behalf of Nationwide and its customers.

The Board was updated on regulatory engagement on the project plans.

No material concerns were raised by the regulators.

The Board was also informed of engagement with the Financial Ombudsman Service in preparation for the payment.

Our climate change governance model provides clear oversight and management of climate-related issues.

Our Board has ultimate accountability for all climate-related matters and sets strategic direction for our climate change ambitions.

This year, our Board engaged regularly on climate-related matters, including receiving updates on progress towards our scope 1 intermediate (by 2030) science- based target, and updates on progress being made towards our Mutual Good Commitments.

Climate-related Senior Managers Regime (SMR) accountabilities sit with our Group Chief Executive Officer, supported by the Chief Executive Officer of Virgin Money.

This year, our executive management-level, and operational-level, committees engaged regularly on climate change, including discussing the outcomes of our 0% interest Green Additional Borrowing mortgage pilot research paper and reviewing the appropriateness of our intermediate (by 2030) science-based target for mortgages.

Progress towards our scope 3 targets, particularly for residential mortgages, will not be possible without substantial additional government-led policy, and consumer action.

This year, we conducted internal modelling on the estimated impact of the Government’s green homes policy and customer behaviour on emissions reductions, to understand the potential impact on our intermediate (by 2030) science-based target for residential mortgages.

Given the slow progress in UK policy and consumer action to green UK homes to date, our internal modelling demonstrates that our mortgages target is not achievable.

For the time being, we have retained our target, and have aligned our targets across the Group, where feasible.

However, we will be keeping our targets under active review as we continue to monitor the UK’s progress towards its net-zero ambition.

As a mutual, we are here to support our customers.

Unlike our banking peers, we do not have to pay shareholders dividends.

We also commit at least 1% of our pre-tax profits3 each year to charitable activities, supporting our broader communities.

As a mutual, the value we create is used to benefit our members as owners – who are customers with a Nationwide-branded current account, mortgage or savings.

As a modern mutual, we aim to improve banking for all, making a positive difference for our members and customers, our communities and society as a whole.

The Committee reviewed the level of provisions maintained based on expert judgement to ensure that they appropriately reflected management’s expectations of credit losses.

The most significant of these at the 2024/25 financial year end was the impact of ongoing affordability risks to borrowers as a result of economic uncertainty, including the impact of higher mortgage interest rates.

The Committee also asked management to explain the relationship between these expectations and the IFRS 9 impairment provisions that emerged in the period between acquisition and the year end.

This included the implementation of SS1/23: Model risk management principles for banks and a review of management information to ensure that all models used in calculating provisions were fit for purpose.

The Committee received updates on several matters during the year and considered whether the provisions established were appropriate.

This included conduct issues which may require customer redress, and legal and regulatory matters.

The Committee concluded that the provisions held, and disclosures made in relation to contingent liabilities and contingent assets were appropriate.

The Committee concurred with management’s updated presentation for the 2024/25 financial year, in which income statement amounts related to provisions for customer redress, and legal and regulatory matters are no longer separately disclosed on the face of the income statement and are instead included within administrative expenses.

In the 2025 Financial Times’ Diversity Leaders list, our Nationwide brand was the highest-ranked UK high street financial services provider for the fourth year running31.

By combining data across the Group, we have seen an overall reduction in the diversity of our all-colleague population, but an increase in the diversity of our senior leader population, when compared to 2024 data for the Nationwide sub-group only.

We have made progress in the diverse representation of colleagues at our Nationwide sub-group, achieving five of our seven diversity measures (see page 34).

We will be reviewing our diversity measures to set appropriate targets for the Group going forward.

More information on our emissions, methodology used, energy efficiency action taken, and progress towards our intermediate (by 2030) science-based emissions targets, can be found in our Climate-related Financial Disclosures 2025, and Basis of Reporting5.

We continue to disclose our scope 1, 2, and 3 emissions, in line with the Government’s Streamlined Energy and Carbon Reporting regulatory requirements.

Our emissions data continues to help track progress towards our intermediate (by 2030) science- based targets and Transition Plan.

Our Mutual Good Commitments are supported by our scope 1, 2, and 3 emissions intermediate (by 2030) science-based targets.