Nationwide profits hit £1.3bn

NationwideNationwide building society, Britain’s biggest customer-owned lender, has reported a 23 per cent rise in full-year pre-tax profits to £1.3bn, up from £1.04bn a year earlier.

The mutual, which is the UK’s second biggest provider of home loans, also said underlying profit had increased 9 per cent on the back of its mortgage lending volumes swelling to a size last seen before the 2007-8 financial crisis.

Nationwide said it now accounted for more than one third of net lending in the market over its last four financial years.

The lender forecast the UK economy would return to annual growth of 2-2.5 percent once uncertainty surrounding the outcome of next month’s referendum on EU membership is lifted.

Its new chief executive, Joe Garner, who took over last month, said the results showed strong mortgage lending and strong savings inflows.

He said that Nationwide offered “outstanding customer service” and added that it was his job to build on this success.

Joe Garner
Joe Garner

The society said that “uncertainty surrounding the EU referendum and the global economic outlook” would be likely to have some impact on UK economic activity in the near future.

However, it added: “We expect the housing market to remain resilient, with any dampening of activity from modest increases in interest rates offset by a strengthening labour market and an under supply of housing.”

Nationwide said it had seen its net mortgage lending rise 28 per cent to £9.1bn, from £7.1bn the year before.

Over the past four years, it had accounted for 36 per cent of net mortgage lending in the UK, reinforcing its position as the country’s second-largest mortgage lender, it added.

Last year member deposit balances rose by £6.3bn, as against an increase of £1.9bn in the previous year.

“More people are also choosing to manage their money with Nationwide, with over half a million new current accounts opened in the year,” said Mr Garner.

Nationwide’s key capital ratio rose to 23.2 percent, the highest level among major UK lenders, from 19.8 percent a year ago.

Meanwhile, Bradford & Bingley - which was nationalised and split up after the sub-prime mortgage crisis in 2008 and consequently a subsidiary of UK Asset Resolution - saw underlying profit fall by more than 13 per cent to £436m for the first three months of the year, down from the £503m recorded for the same period last year.

The decrease was mostly due to slower house price growth compared with the previous year, the firm said.

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