Summary

Nationwide: S&P, outlook revised to stable and ratings affirmed

08 December 2011

Following a review of Nationwide Building Society under its revised bank criteria, Standard & Poor’s (S&P) has today (08.12.12) revised Nationwide’s outlook to stable from negative. It has also affirmed Nationwide’s credit ratings at ‘A+ / A-1’.

Commenting on the announcement, Graham Beale, Chief Executive, Nationwide Building Society said: “Standard & Poor’s affirmation of our A+ rating and upgrading of our outlook to ‘Stable’ from ‘Negative’ today, despite the challenging economic conditions, are testament to the ongoing strength and performance of our business. We continue to manage one of the strongest and best capitalised financial organisations in the UK, and I am pleased that S&P has recognised our ‘high systemic importance’. Our prudent, long-term approach means that our members can continue to rest assured that we put their needs and the security of their money first.”

In its statement Standard & Poor’s highlighted the following:

Nationwide's management team has capably steered the society through the turbulent economic and market conditions since 2007, and that its mutual status supports a prudent, long-term approach to business planning.

Nationwide is by far the largest U.K. building society and ranks as the country's second-largest provider of liquid household savings and third-largest residential mortgage lender, with a share of each market of about 11%.

It is also steadily increasing its presence in other retail products such as current accounts, which helped to raise the noninterest income element of underlying revenues to 23% in the first half of the 2011/2012 financial year.

Residential mortgages represented 83% of gross customer lending at Sept. 30, 2011, and this portfolio has a much stronger impairments and arrears record than the overall market. For example, 0.65% of self-originated mortgage accounts were three or more months in arrears at Sept. 30, 2011, which was one-third of the industry average.

We consider that Nationwide is relatively well positioned to withstand the possibility of a renewed downturn in the U.K.'s economic performance and property prices in 2012.

Webcast of half year results on Tues 22nd November 2011

We would like to invite you to the webcast of our Interim results presentation at 09.00 GMT on Tuesday 22 November 2011 by Mark Rennison, Executive Director.

Please register using the link below for the webcast:

http://cache.cantos.com/webcast/static/ec2/4000/5275/9523/9723/Lobby/default.htm

Or dial into the audio teleconference with the following details:

UK Access Number + 44 (0)20 3140 0722
UK Toll Free Number 0800 368 1917
US Toll Free Number 1 866 978 9967

Replay (available for 7 days)
UK Toll Access Number +44 (0)20 3140 0698
UK Toll Free Number 0800 368 1890
US Toll Free Number +1 877 846 3918
Conference Reference 380511#

Fitch Announcement

Credit ratings have hit the headlines again today (3rd November 2011), with the rating agency Fitch announcing reviews of financial services organisations.

Fitch has today downgraded Nationwide’s long-term rating by one notch. Our long-term rating is now A+ (from AA-), resulting in a drop in our short-term rating to F1 (from F1+). For context, the new Fitch rating of A+ will align with our current Standard and Poors rating of A+ and is still one notch higher than our Moody’s rating of A2.

Nationwide remains one of the strongest and best capitalised financial organisations in the UK. We have made a profit throughout the financial crisis and have not had to be bailed out by the government. Our members can rest assured that their money remains safe with us because we put their needs and the security of their money first.

Fitch recognises that ‘Nationwide's ratings continue to be supported by its strong franchises in the UK mortgage and savings markets, a large and low-risk mortgage portfolio, stable deposit base and adequate liquidity.’

In addition, we remain as the UK’s third largest mortgage and savings provider, and we were one of only three UK financial institutions in the ‘World’s 50 Safest Banks’, as named by Global Finance magazine this year.

Our members can rest assured that their money remains safe with us because we put their needs and the security of their money first.

Nationwide Acquires UK Residential Mortgage Portfolio From Bank Of Ireland

Nationwide Building Society has today announced the acquisition of part of Bank of Ireland's UK residential mortgage portfolio. The £1.1 billion deal will see over 14,000 Bank of Ireland mortgage customers transfer to Nationwide's subsidiary, The Mortgage Works, in December 2011.

The mortgages are all in England, Scotland and Wales, with an average LTV (loan to value) of approximately 50%. At the time of the deal, none of the accounts are in arrears.

The acquisition further reinforces Nationwide's position as the UK's third largest mortgage lender, whilst the new customers can rest assured that their mortgages will be managed by one of the most respected and secure financial institutions on the high street. The Mortgage Works has over 20 years experience in the mortgage market and boasts a reputation for innovative products and great customer service.

Announcing the deal, Graham Beale, Chief Executive of Nationwide, said: "This is excellent news for Nationwide and for our customers. We have acquired a high quality portfolio of low-risk mortgages with an impressive LTV ratio that brings real value to the Society.

"Our new customers can take confidence in the fact that their mortgages are now being looked after by the world's biggest building society with over 150 years experience of helping people own their home."

Fitch Rating Agency Review

Following the recent announcement by Moody’s, the rating agency Fitch has today announced that they have reviewed their ratings for a number of UK financial services companies.

Like Moody’s, this review was to assess the level of assumed Government support for banks and building societies in the future.

Fitch’s announcement is part of an industry-wide review of assumed Government or systemic support (which they call ‘Support Rating Floors’). Two of our competitors have seen downgrades to their long-term rating as a result of the reduction in their support rating.

Unlike some of our competitors, our current Fitch rating does not include any assumed Government support – they see us as being financially strong enough to stand on our own two feet. So while Fitch have reduced our Support Rating Floor, our long and short term ratings remain unchanged.

Nationwide as the UK’s third largest mortgage and savings provider remains one of the strongest and best capitalised financial organisations in the UK.

Moody's downgrades 12 UK financial institutions

Moody's Investor Service has now concluded their review of systemic support assumptions from the UK government for 12 UK financial institutions which was initiated 24 May 2011.

Moody's reassessment of the support environment in the UK has today resulted in a two notch downgrade in Nationwide’s long term rating (from Aa3 to A2).

Moody's believes that the government is likely to continue to provide some level of support to systemically important financial institutions, which continue to incorporate up to three notches of uplift. The downgrades do not reflect a deterioration in the financial strength of the banking system or that of the government.

August press release, Moody's upgrades Nationwide's standalone rating

We are pleased to announce that Moody's has upgraded our standalone rating, which includes subordinated debt, confirming our safe and secure position.

Our long-term rating has received a two-notch increase from Baa2 to A3 and our outlook status has also improved from 'negative' to 'stable'.

We are also pleased to announce that Moody's has confirmed our short term rating as Prime-1.

Nationwide pledges support for ICB proposals

Nationwide pledges support for ICB proposals