MortgagesFeb 12 2016

Nationwide profits up 15%

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Nationwide profits up 15%

Nationwide Building Society’s underlying profit before tax for the nine months until the end of last year was up 15 per cent at £1.12bn.

Gross mortgage lending from 5 April until 31 December 2015 was up 16 per cent on the comparative period at £23.6bn, representing a market share of 13.5 per cent.

Net lending increased 18 per cent and the group’s market share of 22.3 per cent continues to be significantly greater than its 12 per cent share of the mortgage market, driven by both strong gross lending and retention, according to the statement.

The average loan-to-value of new lending was consistent with the same period last year at 69 per cent.

Nationwide’s underlying cost income ratio has increased from 49.8 to 53.1 per cent - with the increase attributed to investment in new digital technology and the modernisation of point of sales systems, inflation and continued investment in the brand.

The results also noted the building society continues to review compliance with ongoing and emerging regulatory matters, including consumer credit legislation, recognising a net provision charge of £55m year to date in respect of potential customer redress, of which £31m was raised in the last quarter.

Current provisions include latest experience and information included in the Financial Conduct Authority’s consultation paper on PPI and the Plevin case.

Graham Beale, Nationwide’s chief executive, pointed out statutory profit was also up 19 per cent to £1.12bn.

He said: “The financial results have benefited from our success in key markets and a strong margin, reflecting the higher market rates for mortgage loans prevailing in recent years.”

He also noted that Joe Garner is set to succeed him from 5 April this year, adding he was proud to have led the society for the last nine years.

Mr Garner said: “I remain confident and excited about what Nationwide can offer in the future and I wish Joe every success.”

peter.walker@ft.com