Nationwide Building Society

The stable outlook reflects S&P Global Ratings' view that Nationwide will continue to deliver resilient profitability and maintain a robust balance sheet despite the challenging economic environment, and a competitive mortgage market in the U.K. We expect the group's strong base of bail-in-able and other capital instruments will continue to bolster this solid performance, further supporting our 'A+' issuer credit rating. We could lower our ratings if Nationwide were unable to sustain recent performance improvements, likely precipitated by stronger-than-expected competition, weakening cost control, or deterioration in its risk appetite and asset quality. An upgrade is unlikely in the next 24 months. We could consider an upgrade in the medium term if Nationwide meaningfully expanded and diversified its franchise while maintaining

... position is strong and, together with its ALAC buffer, drives our rating on the society. On April 4, 2022, Nationwide's risk-adjusted capital (RAC) ratio was 12.7%, and we project capital generation and retention to outstrip risk-weighted asset growth in the coming two years (see table 2). Consequently, we expect the RAC ratio to move toward 14.5%-15.0% by the end of the same period, providing further support to the rating. Alongside this going concern capital strength, Nationwide's ALAC buffer is an important support to our rating. Our measure of the group's bail-in-able capital comfortably exceeded 6% of S&P Global Ratings' risk-weighted assets on April 4, 2022, and we expect this to remain the case. Nationwide runs a strong mortgage franchise, tempered by its concentrated focus on U.K. household lending. The society is the U.K.'s second-largest residential mortgage lender with a 12% market share, and is also one of the U.K.'s largest...

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