Nationwide to raise £300m on back of profits growth

Referring to the near collapse of the Co-operative Bank, Nationwide’s group director Alison Robb said the mutual was looking to raise an additional £300m to “further strengthen our balance sheet and support organic growth” within the building society.

Ms Robb was speaking as Nationwide announced interim results for the six months to 30 September, with gross mortgage lending rising by 37 per cent to £14bn, and more than 30,400 mortgages advanced to first-time buyers, representing 22 per cent of the total FTB market.

Pre-tax profits grew from £103m for the same period in 2012 to £270m this year, while the number of new accounts opened at Nationwide grew by 16 per cent.

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Ms Robb suggested that Nationwide would not be participating in the government’s Help to Buy scheme, saying: “We already offer mortgages up to 95 per cent LTV. While we support the scheme it’s time for others to take a lead.”

She added that the mutual was “in very good shape” for the implementation of the Mortgage Market Review, and had invested significantly in its face to face and telephone advice channels, in addition to operations, underwriting and loan processing.

Key facts

£14bn - gross mortgage lending

30,400 - total mortgages sold in six months to September 2013

Adviser View

Graeme Mitchell, managing director of Scottish Borders-based advisory firm Lowland Financial, said: “Nationwide has probably benefitted as a mutual, from being less tainted than the rest of the banking industry. However, I would question how the mutual intends to raise an extra £300m.”