Nationwide: Sound results with integration progress

Research evidence excerpt

Nationwide: Sound results with integration progress

Accessible version

Nationwide

Sound results with integration progress

Earnings Review

Good FY26 results 21 May 2026

Nationwide’s FY26 showed progress on profitability and the integration of Virgin Money. High Grade Credit

Underlying profit of £2.1bn in FY26 was 9% higher yoy, given a 22% increase in revenue United Kingdom

to £6.4bn (vs the prior-year period with only 6 months of Virgin Money). In 2H26 (to Banks

March 2026), adjusted pre-tax profit of £994mn was 11% higher hoh, due to an NII- Luis Garrido, CFA

driven 5% revenue increase, flat costs and still contained loan impairments (12bps of Research Analyst

loans, on our number). With asset quality benign and large capital buffers, we see the BofASE+33 1 8770(France)0308

numbers as supportive. We see Nationwide as typically fairly valued, with selected luis.garrido@bofa.com

exceptions. We prefer the $4.351% ’30 senior preferred bonds at Z+88bps (OW) to the

$3.96% ’30-29 SNP at Z+94bps given our view that bailing in SNP creditors has become

theoretically possible again (even if low likelihood). See our note on bail-in debt.

CCDS: core capital deferred shares

Virgin Money transfer completed in April (part of CET1 capital)

Nationwide completed on 2 April 2026 the Part VII transfer of Virgin Money’s banking

assets and liabilities to the society. The next steps starting this year are client CET1: common equity tier 1

migrations to the Nationwide brand, and Nationwide-branded business banking products.

FY26: financial year ending 31 MarchManagement expects integration expenditure to peak over the next 12 months.

Structural hedge sustains NII hoh: half over half

Net interest margins rose by 6bps hoh to 164bps in 2H, supported by income from the

structural hedge.