Sunday 16 December 2018

Nationwide Building Society warns of intense competition as profits slip

The lender said it was up against tough comparative figures from a year earlier.

Nationwide has warned of ‘intense competition’ and a subdued housing market in the months ahead (Jonathan Brady/PA)
Nationwide has warned of ‘intense competition’ and a subdued housing market in the months ahead (Jonathan Brady/PA)

By Kalyeena Makortoff, Press Association Chief City Correspondent

Nationwide Building Society has reported a 12% drop in first-quarter profits and warned of “intense competition” and a subdued housing market in the months ahead.

The lender said statutory pre-tax profits fell to £281 million in the three months to June 30, from £322 million over the same period last year.

However, the bank said it was up against tough comparative figures, with last year’s numbers boosted by its £26 million VocaLink disposal.

Underlying profit for the period was also lower however, down from £301 million to £270 million.

The number of new accounts opened over the period was 186,900, down from 202,000 a year earlier, though member deposit balances grew by £4.2 billion thanks to a strong performance from Individual Savings Accounts (ISA).

Gross mortgage lending rose 3.7% to £8.4 billion

Nationwide Building Society chief executive Joe Garner said he expects tough competition in the months ahead.

“Our outlook is unchanged from the full year, and we expect the economy to grow at a modest pace over the next 12 months.

“We are observing consumers adapting their behaviours in response to the pressure on disposable income.

“The housing market looks set to remain relatively subdued with house prices broadly flat in 2018. Against this background, we also expect intense competition to persist in our core markets.”

ipanews_590a02af-eb49-4b47-96a0-3bd6ad13bd2e_embedded224765872
Nationwide chief executive Joe Garner said he expects tough competition in the months ahead (Johnnie Pakington/PA)

Nationwide said costs for the year were in line with expectations, adding that it remains “committed” to its efficiency programme.

The building society is currently targeting savings of £300 million by 2022, and said it would update on its progress during interim results in November.

Press Association

Today's news headlines, directly to your inbox every morning.

Editors Choice

Also in World News