Nationwide Building Society has seen its pre-tax profits drop by £183m last year, but maintains the fall was a result of its decision to "significantly increase" investment in its member service.
In interim results published today (February 8) the lender reported a profit before tax of £703m for the period of April to December 2018, down from £886m in the same period a year earlier, with a net interest margin of 1.26 per cent.
Nationwide’s chief executive Joe Garner said the society's profits excluded a charge of £167m relating to asset write-offs and additional technology spend.
Mr Garner said: "In September we took the conscious decision to increase significantly our investment in the society in the full knowledge that it would impact profitability in the short-to medium-term but would be of long-term benefit to our members.
"This investment is to ensure we can continue to meet our members' changing needs in an increasingly digital future.
"At the same time, consistent with member feedback, we remain committed to and are investing in our presence on the high street."
Nationwide’s gross mortgage lending increased last year to £26.8bn from £24.1bn and net lending to £6.1bn from £3.9bn, supported by customer deposit balances growing to £5.9bn.
The lender reported an improved performance in its buy-to-let sector following changes to its product range, with gross mortgage lending in this category growing to £3.4bn from £2.5bn the previous year.
Mr Garner added: "Looking ahead to the fourth quarter, as consumers continue to benefit from considerable choice, we intend to remain competitive and thus expect that lending margins will continue to moderate.
"We are confident that the society's financial strength means we can continue to support members, as we have always done."
rachel.addison@ft.com
