Nationwide Building Society will be handing out £340 million in payments to eligible members.

The Swindon-based business made the announcement after reporting its strongest financial results on record, but cautioned over reduced activity in the mortgage market and subdued house prices for the rest of the year.

The mutual lender saw its underlying pre-tax profit surge to £2.2 billion in the year to April, from £1.6 billion this time last year, while its total underlying income jumped to £4.7 billion from £3.9 billion.

The strong financial performance has allowed it to launch the Nationwide Fairer Share Payment, where eligible members will receive £100 into their current accounts in June.

Nationwide said it was about rewarding members “who have the deepest banking relationships with us”, and it is also introducing the Nationwide Fairer Share Bond.

Chief executive Debbie Crosbie said: "We can do this because we’re a building society, not a bank, and our profit is reinvested for our members’ benefit.

“Our strategy is to increase value, offer simply brilliant service, be good for society, and to become simpler and more efficient.

"This will ensure Nationwide’s future strength and our ability to support customers and wider society today and for the long term.”

The company also invested £100 million in cost-of-living support, which included a supermarket cashback offer and a dedicated cost-of-living hotline.

As for the future, Nationwide's boss said the economic outlook remains uncertain and households could struggle to adjust to higher interest payments.

She added: “Overall, our borrowers are relatively well placed to withstand challenges in the medium term, given the significant proportion of borrowing on fixed rates, and the relatively low number of borrowers who spend a high proportion of their income on debt repayments.

“However, the transition to higher interest payments is a challenge for households as they adjust their expenditure priorities.

“We will continue to support those borrowers who face payment difficulties."

In February, the Adver learned that the building society planned to make 450 staff redundant to "streamline" certain parts of its central, non-member-facing teams around the UK.

At the time, the company said an effort had been made to keep the number of employees affected to a minimum and to support those leaving their roles.

Nationwide employs around 18,000 staff across the country and 6,500 solely at its Pipers Way headquarters.