Nationwide to pour another £1.3bn into technology
Nationwide Building Society announced on Friday that it is making an additional technology investment of £1.3bn, taking its overall investment plans to £4.1bn over the next five years.
The organisation said the investment would enable it 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, it said it would continue to “transform” its member experience on the high street through investment in branches and other channels.
Through the programme, the society said it would “make the most” of 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,” said the society’s chief executive officer Joe Garner.
“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.”
Garner said Nationwide believed that members wanted 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 said it expected to recognise an additional charge of between £200m to £250m in the current financial year in light of the incremental investment announced on Friday, approximately half of which would be recognised in the first half.
The society said that full year range represented a “reasonable estimate” for the ongoing annualised impact on profits over the period to 2023, as it delivered the programme.
It said it remained committed to its financial performance framework, and expected to continue its recent track record of improving capital ratios over the period, excluding the impact of any capital calls it could choose to make, and any proposed regulatory changes.
Nationwide did claim its investment strategy would enable greater efficiencies, with its sustainable saves target extended from £300m by 2021 to £500m by 2023.
“We have delivered over £1 billion in member financial benefit over the last two years and remain committed to delivering long-term good value to our members,” the board said in its statement.
“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.”