Joe Garner

The lender, which is the UK’s biggest building society, revealed a huge rise in deposits as customers chose to save their money throughout 2020 despite a drop in savings rates.

For the year ending 4 April 2021, Nationwide’s underlying profit increased to £790 million, compared to the £469m reported the year before. The lender’s costs were also reduced to £94m from £2.32m for the same period last year.

Nationwide said deposits during the year to the end of April increased by £10.6bn, almost twice the £5.7bn saved in the year prior to the pandemic.

The increase in savings arrived despite reduced savings rates spurred on by the economic uncertainty caused by the pandemic. The bank warned customers last year that it was unlikely to pay savers much above the Bank of England’s 0.1% base rate.

Nationwide’s net interest margin also rose to 1.21%, from 1.13%.

Administrative expenses dropped by £94million to £2.2bn, thanks to lower running costs during COVID-19, as the lender took advantage of the changes to close down some offices.

The lender also cut around 100 jobs last summer and recently told 13,000 staff that they could adopt a hybrid working model in future.

Joe Garner, Nationwide’s chief executive, said this year has shown “the financial strength of the building society mutual model”.

He said: “It has been a tough year, one that tested the resilience of people and businesses. Given the profound uncertainties we faced, we focused on the things that were most important in times of crisis: namely to keep our people and members safe and our Society strong.

“We entered the crisis in a position of financial strength and, in the face of a highly uncertain environment, we took steps to protect our finances. This meant we could stand by our members, colleagues and communities when they needed us most. From payment holidays and socially distanced services, to personal assistance for the most vulnerable and remote working for all our office employees, we responded with flexibility and humanity.”

He concluded: “We finished the year financially and operationally strong, and well-placed to support our members in future.”