Interim Results Presentation

For the 6 months ended 30 September 2019

Highlights

3

Our Society has grown strongly for the past three years

Total membership (m) Residential mortgage balances (£bn) Current account credit balances (£bn)

14.814.9

15.1

15.415.5 15.5

15.915.99

FY

15/16

H1

16/17

FY

16/17

H1

17/18

FY

17/18

H1

18/19

FY

18/19

H1

19/20

More than 1m new members;

almost 16m members

Over 50% growth in

current account balances

162

168.35

6 171.263175.262177.299

180.96

7186.012189

FY

15/16

H1

16/17

FY

16/17

H1

17/18

FY

17/18

H1

18/19

FY

18/19

H1

19/20

Continued growth in mortgages

14.8

16.617.5

19.8 19.8

21.721.1

22.9

FY

15/16

H1

16/17

FY

16/17

H1

17/18

FY

17/18

H1

18/19

FY

18/19

H1

19/20

4

Short-term profits lower as we prioritise member value and service

Underlying profit before tax (£m) Member financial benefit1 (£m)

1 Member financial benefit is quantified as our interest rate differential plus member incentives and reduced fees. 2 © Ipsos MORI 2019, Financial Research Survey (FRS) measure, as defined in the glossary (slide 34).

330 365

H1 2018/19 H1 2019/20

460

307

H1 2018/19 H1 2019/20

55

60

65

70

75

Mar 2016 Mar 2017 Mar 2018 Mar 2019

Nationwide

Peer group

Customer satisfaction score

vs peer group average2 (%)

5

We are delivering on our commitments today as we invest for the future

1 © Ipsos MORI 2019, Financial Research Survey (FRS) measure, as defined in the glossary (slide 34). 2 Institute for Customer Service UK Customer Satisfaction Index, July 2019. 3 Pro-rated from the full year target of at least £400m. 4 Engaged and committed members are as defined in the glossary (slide 34).

▪ Service and proposition: reengineering our

digital experiences, Later Life lending,

Nationwide for Business

▪ Infrastructure: system simplification and

enhancement progressing well, improving

resilience

▪ Innovation: 9 venturing investments in the

past year

▪ Branches: 150 refurbished since 2017

▪ Technology talent: premises secured and

recruitment underway for in-house

technology hubs

Measure TargetH1 19/20

performance

Outstanding service Customer satisfaction

FRS: 1st + 4.0%pts

in our peer group

UKCSI: Top 5

1st + 5.8%pts1

8th2

Value for members

Member financial benefit

Engaged members4

Committed members4

At least £200m3

10m by 2022

4m by 2022

£365m

9.4m

3.5m

Financial strength UK leverage ratio > 4.5% 4.6%

Key performance indicators Investing for the future

6

1.8

5.1

2.5

H1 17/18 H1 18/19 H1 19/20

427399 389

H1 17/18 H1 18/19 H1 19/20

Growth in member deposits

maintains market share

We have seen growth in mortgages, savings and current accounts

Change in deposit balances (£bn)Gross mortgage lending (£bn)

Current account openings and

switches remain robust

Market share of first time buyers2 (%) Market share of stock of deposits3 (%)

16.7 17.3 16.3

H1 17/18 H1 18/19 H1 19/20

Current accounts opened (‘000)

Market share of current account switches1 (%)

20.2 21.518.7

H1 17/18 H1 18/19 H1 19/20

Mortgage lending in line with expectations,

as we continue to support FTBs

10.0 10.1 9.9

H1 17/18 H1 18/19 H1 19/20

21.1 21.4 18.5

H1 17/18 H1 18/19 H1 19/20

1 Source: Pay.UK monthly CASS switching market data. 2 Source: UK Finance and Nationwide calculations. Share of number of loans to FTBs. 3 Source: Bank of England and Nationwide calculations.

Financials

8

£ million H1 2018/19 H1 2019/20

Underlying income 1,590 1,541

Underlying costs (1,100) (1,125)

Impairments (45) (57)

Other provisions 15 (52)

Underlying profit 460 307

Other items 56 2

Statutory profit 516 309

Underlying cost income ratio 69.2% 73.0%

Our profits reflect expected sustained competition, investment and PPI

Other items (£ million) H1 2018/19 H1 2019/20

FSCS release 9 0

Gains from derivatives and hedge accounting

47 2

Total 56 2

▪ Underlying income has reduced reflecting sustained competition in our core markets

▪ Underlying costs have increased by £25m, in part reflecting our future technology and services

▪ Provisions have increased primarily due to additional PPI charges

▪ £365m of member financial benefit (H1 2018/19: £330m)

9

Maintaining a low risk, strongly capitalised balance sheet

Key ratios (%) 04 Apr 19 30 Sept 19

Liquidity coverage ratio 150.2 140.3

CET1 ratio 32.2 31.5

UK leverage ratio 4.9 4.6

1 Balances are shown net of provisions. 2 Treasury assets (including liquidity portfolio). 3 Shares (member deposits) 4 Total members’ interests, subordinated liabilities and subscribed capital.

£ billion 04 Apr 19 30 Sept 19 %

Residential mortgages1 185.8 188.9 75

Other lending 13.3 12.9 5

Liquidity2 32.7 38.8 16

Other assets 6.5 9.4 4

Assets 238.3 250.0 100

Retail deposits3 154.0 156.5 62

Wholesale funding 61.2 67.6 27

Other liabilities 3.0 3.8 2

Capital & reserves4 20.1 22.1 9

Liabilities 238.3 250.0 100

▪ Balance sheet growth driven by net mortgage lending of £3bn and an increase in cash and collateral held

▪ Capital position remains strong with our CET1 and UK leverage ratios at 31.5% and 4.6% respectively

10

Net interest margin has decreased due to a reduction in mortgage income and growth in liquid assets

Net interest income drivers1 (£m) Net interest income (£bn) & net interest margin (%)1

1.50 1.51 1.44 1.48

1.39

1.331.28

1.23 1.221.12

H1 17/18 H2 17/18 H1 18/19 H2 18/19 H1 19/20

Net interest income NIM

1The opportunity has been taken to reclassify certain items previously included within net interest income to reflect better the nature of the transactions. As a result, gains and losses recognised on the disposal

of investment securities classified as FVOCI are now presented within net other income, as opposed to net interest income. Gross margin has been restated from a LIBOR to SONIA basis for prior periods.

Average assets (£bn)

11

Closed mortgage book

Average balances (£bn) & gross margin1 (%)

Open mortgage book

Average balances (£bn) & gross margin1 (%)

1Gross margin has been restated from a LIBOR to SONIA basis for prior periods.

New business margins stabilise, as managed rate book runs off

32.829.3 26.5 23.7 21.3

3.83.5

3.33.0

2.8

2.24% 2.23% 2.22% 2.22% 2.22%

1.50%

1.60%

1.70%

1.80%

1.90%

2.00%

2.10%

2.20%

2.30%

-5.0

5.0

15.0

25.0

35.0

45.0

55.0

65.0

H1 17/18 H2 17/18 H1 18/19 H2 18/19 H1 19/20

Closed managed rate mortgage books Legacy books Gross margin %

123.9130.4

138.8147.4

155.612.1

11.1

10.3

9.2

8.4

1.90% 1.79%

1.63%1.49% 1.49%

-0.50%

0.00%

0.50%

1.00%

1.50%

100.0

110.0

120.0

130.0

140.0

150.0

160.0

170.0

180.0

H1 17/18 H2 17/18 H1 18/19 H2 18/19 H1 19/20

Mortgage deal books Revert rate mortgage books Gross margin %

12

Our cost profile reflects our investment in our future

▪ Administrative expenses have seen a modest increase of £25m compared to the same period last year

▪ The period-on-period growth is mainly attributable to strategic investment, including development of our business banking proposition

▪ Our investment continues to support the long-term interests of our members, including improving member service and propositions, both in branch and through digital channels

£ million H1 16/17 H1 17/18 H1 18/19 H1 19/20

Investment and Depreciation 271 287 398 396

Nationwide for Business - - 2 22

Business as usual 667 679 700 707

Total 938 966 1,100 1,125

£ million FY 16/17 FY 17/18 FY 18/19

Investment and Depreciation 596 593 769

Nationwide for Business - - 13

Business as usual 1,425 1,431 1,472

Total 2,021 2,024 2,254

13

Low impairments reflect lending quality

Impairment charge (£m)

1 Residential: percentage of loans, by number. Unsecured: percentage of balances, exc. charge offs. 2 Source: UK Finance, 3m+ arrears balance divided by latest contractual payment.3 Final data point is for Sep 2019.

73

140

105113

4557

FY 15/16 FY 16/17 FY 17/18 FY 18/19 H1 18/19 H1 19/20

Residential lending Consumer banking Commercial & other lending Treasury & other

Retail lending

Residential Unsecured

04 Apr 19 30 Sep 19 04 Apr 19 30 Sep 19

Total balances (£m) 186,012 189,063 4,586 4,889

Provision balances (£m) 206 213 418 441

3m+ arrears1 (%) 0.43 0.40 1.35 1.26

3m+ arrears industry

average2 (%)0.78 0.73

Total negative equity

balances (£m)203 190

Negative equity (£m) 30 27

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Apr 2005 Apr 2007 Apr 2009 Apr 2011 Apr 2013 Apr 2015 Apr 2017 Apr 2019

Nationwide

Industry average

Mortgage balances in 3m+ arrears1,2,3 (%)

141 This table excludes Fair Value through Profit or Loss (FVTPL) balances which totalled £77m as at 30 September 2019 (4 April 2019: £72m).

IFRS9 staging and provisioning stable

Residential mortgages1 Unsecured

04 Apr 19 30 Sep 19 04 Apr 19 30 Sep 19

Balance

(£m)

Share of

book

(%)

Provision

coverage

(%)

Balance

(£m)

Share of

book

(%)

Provision

coverage

(%)

Balance

(£m)

Share of

book

(%)

Provision

coverage

(%)

Balance

(£m)

Share of

book

(%)

Provision

coverage

(%)

Stage 1 176,023 95 0.02 177,377 94 0.02 3,538 77 0.8 3,780 77 0.9

Stage 2 8,479 5 1.5 10,191 5 1.3 761 17 17.3 808 17 17.2

Of which: >30 dpd 480 439 18 19

Stage 3 and POCI 1,438 <1 2.9 1,418 1 2.6 287 6 90.1 301 6 89.8

Of which: >90 dpd or in

possession760 718 59 59

Of which: charged off

accountsn.a. n.a. 209 222

Total 185,940 0.11 188,986 0.11 4,586 9.1 4,889 9.0

Memo: Stage 3 coverage exc.

charged off accounts (%)n.a. n.a. 74 74

15

Customer redress charge driven by pre-deadline surge in PPI enquiries

▪ The Group holds provisions of £168m (4 April 2019: £159m) in respect of the potential costs of remediation and redress in relation to past sales of PPI, issues relating to administration of customer accounts, non-compliance with consumer credit legislation and other regulatory matters

PPI:

▪ In common with the rest of the industry, we received a higher than

anticipated volume of PPI enquiries in the run-up to the 29 August

deadline

▪ Additional PPI provision (£36m) reflects the increase in complaints

we expect to process based on our best estimate, from sampling,

of how many of the PPI enquires will result in a complaint

▪ Nationwide continues to account for only c.1% of PPI complaints

industry-wide

£ million

At 5 April 2019 159

Provision utilised (43)

Charge for the period 54

Release for the period (2)

Net income statement charge 52

At 30 September 2019 168

Customer redress charge

16

We remain strongly capitalised

Movement in CET1 ratio1,2 (%)

Profits support lending growth

Peer group CET1 ratios3 (%)

Continue to benchmark well against peers

1 RWA increase was driven by lending and investment activities in the period and the impact on fixed assets as a result of IFRS 16. 2 The ‘Other’ category primarily relates to the impact of changes in the fair value of assets and

liabilities. 3 Peer group as at 30 Sep 2019 on an end point basis where published.

▪ Revised residential mortgage IRB models and the finalised Basel III framework will increase RWAs significantly, but we expect our CET1 ratio to remain ahead of peers

Movement in UK leverage ratio2 (%)

31.5

15.7 13.9 13.5 13.4

Nationwide RBS Santander UK Lloyds Barclays

5.7 4.9 4.8 4.6 4.6

RBS Lloyds Barclays Nationwide Santander UK

Peer group UK leverage ratios3 (%)

17

CET1

AT1

Tier 2

SNP

6.50% of

leverage

exposure

Buffers

0.75%

Current resources 2020 expected

requirements

£19.7bn

£17.4bn

We meet all existing and known future capital requirements MREL

1 Leverage requirements comprise: 3.25% minimum, 0.35% additional leverage ratio buffer and 0.4% countercyclical leverage ratio buffer. 2 Based on 30 Sep 2019 balance sheet. 3 Risk Adjusted Capital and Additional Loss Absorbing Capacity. 4 Excluding 0.3% surplus Total Adjusted Capital above 10% RAC threshold.

33.3% of RWAs4.0% of UK

leverage

exposure1

7.25% of UK

leverage

exposure2

8.2% of UK

leverage

exposure

Optimising credit ratings

Estimated S&P RAC and ALAC3

Going concern capital (end point)

CET1

AT1

Minimum

leverage

Buffers

P1 4.5%

P2 4.1%

Buffers

4.5%

End point Tier 1

resources

UK leverage

requirement

CET1

requirement

£4.4bn

£11.1bn

£9.6bn

RAC

10.3%

ALAC

8.1%

RAC

10%

ALAC

8%

Current resources RAC / ALAC

thresholds

£19.6bn £19.2bn

4

18

30-Sep-19 New IRB models

(end 2020)

31.5%

>20%

Impact of future regulatory reform

Well positioned to absorb impact of RWA reforms

Proforma CET1 ratio impact▪ The adoption of new IRB models for mortgage exposures1 is expected

by end 2020, and is forecast to reduce the CET1 ratio by

approximately one third

▪ Basel 3.1 regulatory reforms propose the implementation of a RWA

output floor from 2022 followed by a transition period until 2027

▪ As at September 2019, the proforma impact of the Basel RWA output

floor at the end of transition is a reduction of the CET1 ratio by around

one half

▪ UK leverage requirements expected to remain the binding going

concern capital constraint

1 PRA Policy Statement, PS13/17 Residential mortgage risk weights

19

12.516.7

12.0

11.6

2.4

2.526.9

30.8

04 Apr 2019 30 Sep 2019

Other securities Government bonds Cash Total

Continued strong liquidity position

Liquid assets1 (£ billion)

▪ Liquid assets increased during the period by £3.9bn to £30.8bn

(4 April 2019: £26.9bn) driven by an increase in short term

funding balances and collateral inflows

▪ The reported LCR reduced to 140.3% (4 April 2019: 150.2%) as net

cash outflows increased in line with liquid assets

▪ Nationwide continues to manage liquidity risk against an internal

risk appetite which is more prudent than regulatory requirements

1 All figures sterling equivalent. 2 Balances include all RMBS held by the Society which can be monetised through sale or repo.

High quality liquid asset buffer

Key ratios (%) 04 Apr 19 30 Sept 19

Liquidity coverage ratio 150.2 140.3

Net stable funding ratio 130.5 131.82

20

Senior

preferredShort term

Senior Non-

PreferredTier 2 AT1 Outlook

Standard & Poor’s A A-1 BBB+ BBB BB+ Positive

Moody’s Aa3 P-1 Baa1 Baa1 Baa3 Negative

Fitch A+ F-1 A A- BB+ Rating Watch Negative

▪ S&P affirmed positive outlook in November 20181

▪ Moody’s affirmed Nationwide’s long and short term ratings in November 20192. Moody’s changed the Society’s outlook to

negative from stable in October 20183

▪ In March 2019, Fitch changed Nationwide’s long term Issuer Default Rating outlook to rating watch negative from stable in a

sector-wide action for all UK banks relating to Brexit uncertainty4

Credit ratings reflect robust business model but macro uncertainty

1 S&P Global Ratings Credit Opinion, 6 Nov 2018. 2 Moody’s Investors Service Credit Opinion, 18 Nov 2019. 3 Moody’s Investors Service Rating Action, 26 Oct 2018.4 Fitch Ratings Press Release, ‘Fitch places Long-Term IDR’s of 19 UK Banking Groups on Ratings Watch Negative’, 1 Mar 2019.

21

Continue to develop our ESG1 ratings strategy

Rating Latest update

MSCI BBB Jun 19

Sustainalytics2 20.3 May 19

Oekom C – PRIME Aug 18

During the period, we:

▪ Engaged with ESG rating agencies to ensure our ratings better

reflect our business model

▪ Published our Responsible Business Report, and we are

committed to improving our disclosures

▪ Became a signatory to the UN Global Compact, and we are

exploring how we can support the UN Sustainable Development

Goals

▪ Committed to support the TCFD recommendations

1 ESG: Environmental, Social and Governance. 2 Rating corresponds to material ESG risk that has not been or cannot be managed. Nationwide’s score of 20.3/100 indicates that Nationwide is considered to be

at medium risk of experiencing material financial impacts from ESG factors.

Economic outlook

23

The UK economy has slowed, but households have proved relatively resilient

24

Housing market has remained broadly stable

25

House price growth broadly flat, modest declines in London and SE

26

Recent developments in mortgage lending and household deposit markets

Summary

28

No. 1 for customer satisfaction amongst our

peer group1

Which? Banking Brand of the Year 2019

150 branches refurbished since 2017 through

our investment programme

UK leverage ratio of 4.6%

Member financial benefit of £365m

Society technology transformation underway

UK’s most trusted financial brand2

£3m in grants to fund another 73 housing

projects

Planning permission secured for Oakfield

housing project

First high street provider to offer a

comprehensive range of retirement

mortgages

Broadening relationships with our ‘just for

members’ personal loans, insurance and

credit cards

Premises secured for new in-house digital

innovation centres in Swindon and London

1 © Ipsos MORI 2019, Financial Research Survey (FRS) measure, as defined in the glossary (slide 34) 2 Nationwide Brand Guidance Study, as defined in the glossary (see slide 34)

Building society, nationwide

Q&A

30

Contacts

Alex Wall

Head of Financial Risk & Resource Optimisation

alexander.wall@nationwide.co.uk

0845 602 9053

Investor Relations Mailbox

nationwide.treasury@nationwide.co.uk

Appendix

32

IFRS9 economic scenarios

▪ The weighting applied to the downside scenarios has increased to 45% (4 April 2019: 30%) reflecting the increased economic uncertainty as at 30 September 2019

▪ The impact on provisions of the multiple economic scenarios is £137m (4 April 2019: £133m)

Economic variables (%) Central scenario Upside scenario Downside scenarioSevere downside

scenario

UK GDP growth 1.7 2.3 0.4 (0.1)

Unemployment rate 4.1 3.8 5.5 8.0

House price growth 2.6 4.6 (2.0) (5.3)

Base rate 1.1 1.9 0.2 3.5

Weight 40 15 35 10

Key economic variables used in the economic scenarios: average values over the first five years of the scenario

33

1.3

11.5

14.9

5.1 5.0

3.7

12.6

FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26+

TFS

AT1

T2

SNP

RMBS

Covered

bonds

Senior

Preferred3

Diversified funding sources ahead of TFS refinancing

1 All figures sterling equivalent 2 Redemptions assumed at first call date 3 Six month period from 30 Sept 2019

▪ Over the period, wholesale funding increased by £6.0bn to £67.2bn, with issuance across all secured and unsecured platforms, in both public and private transactions

▪ In September, we successfully issued £600m of AT1 to support our UK leverage ratio, with a final order book approaching 10x oversubscribed

▪ As well as issuing in our core currencies of GBP, EUR and USD, we diversified our funding base by issuing in JPY senior debt and CHF covered bonds

Term wholesale funding redemptions1,2 (£bn)

34

GlossaryMeasure Definition

Net satisfaction in core products

(slide 4)

© Ipsos MORI 2019, Financial Research Survey (FRS), 12 month rolling data from March 2016 to September 2019,

c.60,000 adults surveyed per annum, proportion of extremely/very satisfied customers minus proportion of

extremely/very/fairly dissatisfied customers summed across main current account, mortgage and savings. Peer

group defined as providers with main current account market share >4% as of April 2019 (Barclays, Halifax, HSBC,

Lloyds Bank, NatWest, Santander and TSB). Prior to April 2017, peer group defined as providers with main current

account market share >6% (Barclays, Halifax, HSBC, Lloyds Bank, NatWest and Santander).

Net satisfaction in core products

(slide 5, slide 28)

© Ipsos MORI 2019, Financial Research Survey (FRS), 12 months to September 2019, c.60,000 adults surveyed per

annum, proportion of extremely/very satisfied customers minus proportion of extremely/very/fairly dissatisfied

customers summed across main current account, mortgage and savings. Peer group defined as providers with main

current account market share >4% as of April 2019 (Barclays, Halifax, HSBC, Lloyds Bank, NatWest, Santander and

TSB).

Committed and engaged members

(slide 5)

Engaged members have a main current account, a mortgage with balance greater than £5,000, or a savings

account with a balance greater than £1,000. Committed members have two or more of our products, at least one of

which is an engaged membership product.

Trust (slide 28)

Nationwide Brand Guidance Study compiled by an independent research agency, based on all consumer responses,

12 months ending September 2019. Financial brands included Nationwide, Barclays, Co-operative Bank, First Direct,

Halifax, HSBC, Lloyds, NatWest, TSB and Santander.

35

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made an independent assessment of the suitability and

appropriateness thereof, and the nature and extent of your

exposure to risk of loss in light of your own objectives, financial

and operational resources and other relevant circumstances.

You should take such independent investigations and such

professional advice as you consider necessary or appropriate for

such purpose.

Furthermore, you should consult with your own legal,

regulatory, tax, business, investment, financial and accounting

advisers to the extent that you deem it necessary, and make

your own investment, hedging and trading decisions (including

decisions regarding the suitability of any transaction) based

upon your own judgement and advice from such advisers as you

deem necessary and not upon any view expressed in this

presentation. Certain data in this presentation has been

rounded. As a result of such rounding, the totals of data

presented in this presentation may vary slightly from the

arithmetic totals of such data.