It says this is down to a conservative and sustainable approach to lending and a focus on quality. Nationwide estimates it has a market share of 7.1 per cent.
This comes as the building society sees its underlying profit before tax soar by 17 per cent to £781.1m from £668.8m in 2007.
Its commercial gross net lending also saw a massive fall of 29.4 per cent to £2.4bn from £3.4bn in 2007. Gross lending was £6.1bn, down from £7.4bn in 2007.
The building society says its proportion of mortgage accounts 3 months or more in arrears was 0.36 per cent, significantly less than the industry average of 1.21 per cent.
It says it has had a great performance in the retail savings market, attracting £9.1bn of net retail deposits which gives it an estimated market share of 19 per cent.
Its total capacity has increased by 19 per cent to £9.5bn. It has a Basel II solvency ratio of 12.4 per cent, with tier 1 of 9.7 per cent and core tier of 8.1 per cent.
Its investment in 6 structured investment vehicles have been restructured resulting in an increase to its impairment charge of £67.1m in the second half of the year, creating a total charge of £102.2m.
Nationwide chief executive Graham Beale says: “Nationwide has delivered a strong performance in a challenging year during which the industry has faced unprecedented market conditions.
“Our underlying profit increased by 17 per cent and we have been able to return approximately £690 million to our members through better pricing than our competitors. We have concluded the largest ever building society merger and the integration of the Portman business is on track to deliver synergies of £90 million a year by 2009/10.
“Nationwide has an inherently conservative business model with a strong capital base, high levels of retail funding and a low loan to deposit ratio. We funded our net lending in the year entirely from retail receipts. Our consistently prudent approach to lending over a number of years during which we have focused on quality rather than volume, means our arrears remain at very low levels, and are less than a third of the industry average.
Beale adds: “We welcome the Bank of England’s recent initiative with the Special Liquidity Scheme and continue to work with the regulatory authorities in their efforts to deliver liquidity support to the markets. This should ease increased funding costs and contribute towards the recovery of more normal market conditions.
“Whilst the environment will remain challenging, the market now has a much more transparent and realistic view of the cost of risk. Through ongoing prudent cash flow management and disciplined risk based decisions, I am confident that Nationwide will continue to provide its customers and members with the security and value for which we are known.”