Nationwide Building Society has predicted a drop in profits as the lender prioritises increased investment in its technology, the lender's chief financial officer has said.
In its interim results for the period of April to September 2018, out this morning (November 22), Nationwide reported a pre-tax profit of £516m - down from £628m in the same period last year.
The society partially attributed this squeeze on profits to a technology investment of £31m in the period, while committing to investing an additional £1.3bn over the next five years to "transform" its technology estate and capabilities.
Mark Rennison, chief financial officer at Nationwide Building Society, said the fall in profits was expected as a result of the additional investment.
He said: "As a building society we do not aim to maximise profit and our decision to increase investment was in the full knowledge that it would impact on our profitability.
"If we exclude the charge we've recognised for asset write-offs and incremental technology spend, profits are in line with last year and we have held costs flat while servicing rising business volumes.
"We have continued to make the society more efficient and are not only on track to deliver our targeted sustainable saves but have also set a more ambitious target for saves by 2023."
Nationwide anticipates its technology strategy to create 1,000 new roles at the society.
The society’s interim results also reported an increase in gross mortgage lending to £17.3bn, up from £16.7bn in the previous year.
Nationwide attributed the increase to competitively priced products and "good long-term value" offered to its members.
Joe Garner, chief executive at Nationwide Building Society, said the conscious decision to increase the society’s investment was underpinned by the strength of its performance over the last six months.
He said: "Our aim is not to maximise profits, but manage our profits in our members' interests - through a balance of maintaining our financial strength, rewarding members, and investing to meet their future needs.
"We have consciously continued to protect savers and reward loyal members in the first half of the year which has reduced margins, in line with expectations.
"We expect this to continue into the second half of the year as we balance the needs of our members in a competitive market."