Crosbie, formerly of Clydesdale and TSB, is launching an annual “Fairer Share” deal that will see 3.4 million members with current accounts get £100 each.

Members will also be offered a two-year savings bonds that pays a 4.75% interest rate.

Annual profits rocketed 40% to £2.22 billion, a record, that comes on the back of rising interest rates that increase the gap between savings and loan rates.

Crosbie said it is “a joy to be part of an organisation that is mutual”.

“I am firmly committed and believe there is no more relevant time to be a mutual. There is no way the banks can compete with us in the value we are returning to members,” she added.

Crosbie admits members might come to expect a pay out each year, even when the society has not done so well.

“We understand that there is an expectation now, but we want to do it every year,” she said.

The money will be paid direct into accounts next month.

John Lewis, a partnership structured in a similar way, has had to suspend its bonus payments to staff while the business struggles.

Nationwide’s share of the mortgage market has fallen from 11.8% to 10.8%, a sign that rivals have offered deals the society thinks are unsustainable.

There is little chance of Nationwide copying Skipton with a 100% mortgage deal, it admits.

“The market is very competitive,” said Crosbie. “We have chosen not to take a lot of volume.”

Deposits rose by £9 billion to £187 billion at a time when the big banks have reported outflows.

Only 1.21% of customers are more than three months behind on mortgage payments, though that is up a little on a year ago.

It set aside £126 million to cover bad loans.

Nationwide thinks house prices will be “subdued” this year.

Samuel Mather-Holgate of Mather & Murray Financial said:" It’s no surprise that their credit impairment charges are low, but even Nationwide say they expect this to increase this year. Nationwide’s share of the pie remained similar to the previous year, but net lending was down nearly 10% showing an overall decline in confidence in the housing market that is unlikely to return until rates start getting slashed later this year. Overall, these results seem very positive for a lender that will be thankful of their policy to exclude those most vulnerable to economic shocks."

Graham Cox, founder of SelfEmployedMortgageHub.com said: "Nationwide’s preliminary results highlight how fundamentally the mortgage market has changed in the last year. Net lending is less than half what it was in the previous year, illustrating just how much demand has slowed as interest rates have risen.”