TIDMNBS TIDM96MN
RNS Number : 7520A
Nationwide Building Society
14 September 2018
14 September 2018
NATIONWIDE BUILDING SOCIETY (THE "SOCIETY")
Redefining service for a digital world
The Board of Nationwide is pleased to announce today an
additional technology investment of GBP1.3 billion, taking its
overall investment plans to GBP4.1 billion over the next five
years.
This investment will enable the Society to simplify its
technology estate and build new technology platforms to enable
growth and diversification, and drive forward digital, data and
analytic strategies. At the same time, we will continue to
transform member experience on the high street through investment
in branches and other channels. Through this programme, the Society
will make the most of the opportunities ahead, growing membership
and revenue in existing and new propositions, further enhancing
service, simplifying operations and building new skills for the
future.
"Nationwide is in a position of financial strength with capital
levels at an all-time high. At a time when customer expectations of
service are rapidly changing in a digital world, we are investing
to ensure that we continue to provide leading service. We believe
that our members want a combination of human service on the high
street, as well as digital convenience. As a building society, we
are able to deliver both - continuing to invest in our branches
alongside this significant investment in our technology and
operational capabilities. As part of this overall investment, we
anticipate creating an additional technology hub in the UK and
employing between 750 and 1000 people over time."
Nationwide Building Society Chief Executive, Joe Garner.
Key strategic priorities for our five-year investment plan:
-- Continue to build thriving membership by growing membership
and revenues in new and existing propositions
-- Ensure we are built to last by simplifying our operations and
increasing our efficiency - supporting GBP500 million of
sustainable saves by 2023, extending our previous target by a
further GBP200 million
-- Build legendary service capability for a digital age,
combining digital convenience with a human touch - targeting 60% of
active current account members using mobile and launching new
member propositions enabled by the introduction of Open Banking in
the UK
-- Build new skills and talent for the future, remaining true to
our PRIDE values which define our member-focused culture - creating
an additional technology hub employing between 750 and 1,000
people
-- Continue in our aspirations to be recognised as a national
treasure by remaining true to our core purpose of 'building
society, nationwide'
Key financial highlights
-- Aggregate total investment of GBP4.1 billion over next five
years, of which GBP1.3 billion is over previous plans
-- Expect to recognise an additional charge of between GBP200
million to GBP250 million in the current financial year in light of
the incremental investment we are announcing today, approximately
half of which will be recognised in H1. This full year range
represents a reasonable estimate for the ongoing annualised impact
on profits over the period to 2023 as we deliver the programme
-- Remain committed to our Financial Performance Framework and
expect to continue our recent track record of improving capital
ratios over the period, excluding the impact of any capital calls
we choose to make and proposed regulatory changes
-- Our investment strategy will enable greater efficiencies;
sustainable saves target extended from GBP300 million by 2021 to
GBP500 million by 2023
-- We have delivered over GBP1 billion in member financial
benefit over the last two years and remain committed to delivering
long-term good value to our members
-- The Board reaffirms its commitment to existing Core Capital
Deferred Shares distribution policy and does not envisage any
impact on its approach to, or level of, distributions as a result
of this announcement
Investing from a position of strength
In 2016, the Nationwide strategy refresh focused on core purpose
with mutuality and members at the centre. 'Building society,
nationwide', is underpinned by five cornerstones: built to last,
building thriving membership, building legendary service, building
PRIDE and building a national treasure.
The strategy is working and Nationwide is operating from a
platform of strength being named Which? Best Banking Brand for the
second year running. Our focus on trust, service and value has
driven record membership of 15 million and we enjoy leading
customer service levels among our high street peer group(1) .
Capital strength is at an all-time high and we have delivered
record current account growth and gross mortgage lending.
Demand for digital services is increasing. Nationwide saw 200
million more mobile app log-ins last year and the app now has two
million active members - more than on internet, and double the
number two years ago. At the same time, people will always want the
human touch to help with more challenging or complex financial
affairs so we remain committed to our branch network.
We have a simple business model and a single integrated strategy
and organisational structure and our long history of innovation
means we are well placed to execute the plan.
A pre-recorded webcast will be available from 10:30am (UK) on
Friday 14(th) September 2018.
Please click on the link below to access the webcast.
https://webcast.merchantcantoscdn.com/webcaster/dyn/4000/7464/16532/106873/Lobby/default.htm
For further information please contact:
Investor queries: Alex Wall, 020 72616568 or 07917 093632,
alexander.wall@nationwide.co.uk
Media contact: Tanya Joseph, 020 72616503 or 07826 922102,
tanya.joseph@nationwide.co.uk
Sara Batchelor, 01793 657770 or 07785 344137,
sara.batchelor@nationwide.co.uk
(1) (c) GfK 2018, Financial Research Survey (FRS), 12 months
ending 31 March 2018, proportion of extremely/very satisfied
customers minus proportion of extremely/very/fairly dissatisfied
customers summed across current account, mortgage and savings. High
street peer group defined as providers with main current account
market share >4% (Barclays, Halifax, HSBC, Lloyds Bank (inc
C&G), NatWest, Santander and TSB).
Financial Performance Framework
Nationwide has developed a financial performance framework based
on the fundamental principle of maintaining its capital at a
prudent level in excess of regulatory requirements. The framework
provides parameters which allow it to calibrate future performance
and help ensure that it achieves the right balance between
distributing value to members, investing in the business and
maintaining financial strength. The most important of these
parameters is underlying profit which is a key component of
Nationwide's capital. We believe that a level of underlying profit
of approximately GBP0.9 billion to GBP1.3 billion per annum over
the medium-term would meet the Board's objective for sustainable
capital strength. This range, will vary from time to time, and
whether our profitability falls within or outside this range in any
given financial year or period will depend on a number of external
and internal factors, including a conscious decision to return
value to members or to make investments in the business. It should
not be construed as a forecast of the likely level of Nationwide's
underlying profit for any financial year or period within a
financial year.
Forward looking statements
Certain statements in this document are forward looking with
respect to plans, goals and expectations relating to the future
financial position, business performance and results of Nationwide.
Although Nationwide believes that the expectations reflected in
these forward-looking statements are reasonable, Nationwide can
give no assurance that these expectations will prove to be an
accurate reflection of actual results. By their nature, all forward
looking statements involve risk and uncertainty because they relate
to future events and circumstances that are beyond the control
of
Nationwide including, amongst other things, UK domestic and
global economic and business conditions, market related risks such
as fluctuation in interest rates and exchange rates,
inflation/deflation, the impact of competition, changes in customer
preferences, risks concerning borrower credit quality, delays in
implementing proposals, the timing, impact and other uncertainties
of future acquisitions or other combinations within relevant
industries, the policies and actions of regulatory authorities, the
impact of tax or other legislation and other regulations in the
jurisdictions in which Nationwide operates. As a result,
Nationwide's actual future financial condition, business
performance and results may differ materially from the plans, goals
and expectations expressed or implied in these forward-looking
statements. Due to such risks and uncertainties Nationwide cautions
readers not to place undue reliance on such forward-looking
statements.
Nationwide undertakes no obligation to update any
forward-looking statements whether as a result of new information,
future events or otherwise.
This document does not constitute or form part of an offer of
securities for sale in the United States. Securities may not be
offered or sold in the United States absent registration or an
exemption from registration. Any public offering to be made in the
United States will be made by means of a prospectus that may be
obtained from Nationwide and will contain detailed information
about Nationwide and management as well as financial
statements.
, the news service of the London Stock Exchange. RNS is approved by
the Financial Conduct Authority to act as a Primary Information
Provider in the United Kingdom. Terms and conditions relating to
the use and distribution of this information may apply. For further
information, please contact rns@lseg.com or visit www.rns.com.
END
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