Nationwide has raided the customer base of Britain’s banking titans as current account switchers flocked away from legacy firms.
The building society welcomed nearly 73,000 switchers in the first three months of the year, compared to 17,000 outflows, according to Pay.uk data.
This comes after the mutual returned billions to customers in 2024, whilst the FTSE 100’s banking juggernauts used excess capital to hike payouts for shareholders.
Nationwide handed customers £2.8bn in the last year through a mix of reward schemes that offered better rates on savings and loans.
The mutual distributed a £50 payment to over 12 million members in what it dubbed ‘The Big Nationwide Thankyou’ after netting £2.3bn in its acquisition of Virgin Money.
Meanwhile, HSBC, Barclays and Natwest made up half of the £10.7bn in FTSE 100 dividends in April as the banking sector continued to flaunt its shareholder appeal.
Natwest hiked its dividend 26 per cent from 2023 to 21.5p per share and dealt a hefty £4bn to shareholders. Peers Barclays and Lloyds delivered £3bn and £3.6bn to investors.
Barclays faced the steepest fall in current account switchers with a net loss of over 22,000.
The period aligned with Barclays’ major outage on January 31 that left thousands of customers unable to access online banking for up to 48 hours.
Lloyds lost nearly 5,000 switchers inn the period whilst Halifax, part of Lloyds Banking Group, lost 15,000.
Despite this, HSBC ranked third for net gains of 5621.
Top reasons behind switches were listed as mobile app usability, interest earned and customer service. Seven in ten said their new account was better than old.
A record 88,146 switches happened in June taking the second quarter total to 216,519.
Nationwide ‘in a league of its own’
John Dentry, head of the Current Account Switch Service, said the top three gainers being a “legacy bank, long-standing building society, and a neobank shows the depth and diversity of the UK banking system”.
Whilst challenger banks such as Monzo and Starling are viewed as the fatal threat to legacy lenders standing, fintechs have struggled to prevent switches.
Despite securing the second highest in net gains for the second quarter of 2025 Monzo has had to wrestle with maintaining its customer base even as a challenger.
The neobank squeezed a net gain of 6,265 in 2024 as it fought to convert enough switchers to cover departing users.
Starling lost 5634 switchers in the latest quarter with a net loss of 1284.
Personal finance commentator Andrew Hagger told City AM Nationwide had “brushed off any threats from challenger banks” through maintaining its branch network, offering generous switching incentives and fairer share loyalty payments.
The building society has sworn off closing any further branches until “at least the start of 2028”. Meanwhile, the likes of Lloyds and Santander have continued their aggressive overhaul sites, which has led to the latter hiking provisions by 74 per cent to £249m in the first half of the year.
Hagger added: “The likes of Starling and Monzo have made decent strides and performed better in account switching than some of the high street giants including Lloyds, NatWest and Barclays but the UKs biggest mutual looks to be in a league of its own at the moment.”
Mutual’s boss catches fire
Nationwide recorded an underlying income of £5.2bn in the financial year ending March 31, up from £4.7bn for the previous 12 months.
This helped pre-tax profit increase nearly £500m to £2.3bn for the period.
But the growth has come alongside heavy scrutiny for Nationwide’s top leadership.
The mutual’s boss Debbie Crosbie, who took the helm in 2021, has sparked fierce backlash over a 43 per cent rise to her pay packet with it topping £7m – rivalling bonus’ seen across the big banks.
Members eventually greenlighted the package with five per cent – equivalent to over 34,000 members – voting to reject the increase.
Crosbie’s fresh deal will make her the highest paid boss in the building society’s history.