Nationwide has made significant inroads into the customer base of Britain's banking giants, as current account switchers increasingly opt for non-traditional firms.
In the first quarter of this year alone, the building society gained nearly 73,000 new customers through switches, while only seeing an outflow of 17,000, according to data from Pay.uk, as reported by .
This surge comes after Nationwide returned billions to its customers in 2024, contrasting sharply with the FTSE 100's banking behemoths who used excess capital to increase shareholder payouts.
Over the past year, Nationwide has given back £2.8bn to its customers through a variety of reward schemes offering improved rates on savings and loans.
The mutual also distributed a £50 payment to over 12 million members in a gesture it called 'The Big Nationwide Thankyou', following its acquisition of Virgin Money which netted £2.3bn.
Meanwhile, HSBC, Barclays and Natwest accounted for half of the £10.7bn in FTSE 100 dividends paid out in April, as the banking sector continued to emphasise its appeal to shareholders.
Natwest increased its dividend by 26 per cent from 2023 to 21.5p per share, returning a substantial £4bn to its shareholders. Barclays and Lloyds followed suit, delivering £3bn and £3.6bn respectively to their investors.
Barclays experienced the most significant drop in current account switchers, with a net loss of over 22,000.
This coincided with a major outage at Barclays on January 31, which left thousands of customers without access to online banking for up to 48 hours.
Lloyds saw a loss of nearly 5,000 switchers during the same period, while Halifax, part of the Lloyds Banking Group, lost 15,000.
Despite this, HSBC secured third place for net gains with 5,621.
The primary drivers behind account switches were identified as mobile app functionality, interest rates earned, and customer service quality, with seven out of ten customers declaring their new account superior to their previous one.
A record-breaking 88,146 switches occurred in June alone, pushing the second quarter total to 216,519.
Nationwide 'in a league of its own'
John Dentry, head of the Current Account Switch Service, observed that the top three gainers being a "legacy bank, long-standing building society, and a neobank shows the depth and diversity of the º£½ÇÊÓƵ banking system".
While challenger banks like Monzo and Starling are perceived as the existential threat to traditional lenders' dominance, fintechs have battled to stem customer departures.
Even after claiming the second-highest net gains for the second quarter of 2025, Monzo has grappled with retaining its customer base despite its challenger status.
The neobank managed a net gain of 6,265 in 2024 whilst striving to attract sufficient new switchers to offset departing customers.
Starling shed 5,634 switchers in the most recent quarter, recording a net loss of 1,284.
Personal finance expert Andrew Hagger told City AM that Nationwide had "brushed off any threats from challenger banks" by preserving its branch presence, providing attractive switching bonuses, and delivering fairer profit-sharing rewards to members. The building society has pledged not to shut any additional branches until "at least the start of 2028".
In contrast, institutions such as Lloyds and Santander have persisted with their aggressive restructuring of premises, which resulted in the latter increasing provisions by 74 per cent to £249m during the first half of the year.
Hagger commented: "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 º£½ÇÊÓƵs biggest mutual looks to be in a league of its own at the moment."
Mutual's boss catches fire
Nationwide reported underlying income of £5.2bn for the financial year ending March 31, rising from £4.7bn in the preceding 12 months.
This contributed to pre-tax profit climbing nearly £500m to £2.3bn during the period.
However, this expansion has occurred amid intense criticism of Nationwide's senior management.
The mutual's chief executive Debbie Crosbie, who assumed leadership in 2021, has faced fierce opposition following a 43 per cent increase to her remuneration package, which exceeded £7m – matching bonuses witnessed at major banks.
Members ultimately approved the package, with five per cent – representing over 34,000 members – voting against the rise.
Crosbie's new arrangement will establish her as the most highly compensated leader in the building society's history.
