The UK's largest building society, which is owned by its customers, said it would pay a £100 reward direct to the 3.4 million eligible current accounts.

The Fairer Share Payment was due next month, it said, adding that it intended to make further annual distributions so long as they were not detrimental to its financial strength.

The dividend was attributed to pre-tax profits hitting £2.2bn in the year to 4 April - up from the £1.6bn achieved over the previous 12 months.

The performance was driven by rising interest rates over the year that have boosted wider bank earnings as a whole due to the Bank of England's battle against inflation.

Nationwide was not immune from many of the elements that have shot up in price.

The lender said a 4% rise in costs during the year was largely due to inflation but it was able to mitigate some of the additional bills it faced through savings.

It also recognised that the continuing cost of living crisis was taking a toll on its customer base.

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Nationwide set aside a further £126m to cover the likelihood of bad loans.

Net lending fell 10% over the 12-month period, reflecting the tougher economy and likely impact of the now-reversed Liz Truss government mini-budget last September that saw mortgage deals withdrawn temporarily due to market mayhem.

Chief executive Debbie Crosbie said of the annual results: "We have delivered a strong financial performance by providing banking that is fairer, more rewarding and for the good of society.

"Our strongest financial performance means that we are able to launch the Nationwide Fairer Share Payment, as well as the Nationwide Fairer Share Bond - with a highly competitive interest rate on savings for our existing members.

"We can do this because we're a building society, not a bank, and our profit is reinvested for our members' benefit."