Nationwide Building Society has seen its pre-tax profits drop by £144m for the year to April, despite growing its gross mortgage lending by £3.4bn.
In preliminary results, out today (May 21), the lender reported a profit before tax of £833m, down from £977m in the same period a year earlier.
The lender stated the reduced profit was down to a charge of £227m, which accounted for an additional technology spend as well as a write-off of old technology.
This is part of the the society's £1.3bn tech investment it announced last year.
The lender also saw £121m of write-offs of bad loans. Of the total, £74m related to unsecured lending, £41m to residential mortgages and £6m was in the commercial and other lending sector, but a spokesperson said this was in line with the yearly breakdown of consumer loan impairment charges.
The bank saw a net interest margin of 1.22 per cent — narrowed from 1.31 per cent last year — which the bank stated reflected "conscious pricing decisions and competition for lending".
Nationwide’s gross mortgage lending increased in the period to £36.4bn from £33bn the year before and net lending to £8.6bn from £5.8bn, supported by customer deposit balances growing to £6bn.
Joe Garner, chief executive at Nationwide Building Society, said 2018/19 was a strong year for the bank and celebrated the fact that more people had chosen the society for its mortgages, savings and current accounts.
He added: "I believe that the combination of excellent service and great long-term value is driving our growth.
"We remain ahead of our peer group on service and trust. Our strong performance has meant we have provided extra value to members, with member financial benefit of £705m, well above our aim of at least £400m.
"During the year, we also announced a significant boost in our technology investment over five years to ensure we continue to excel on service."
In today’s results, the lender made a pledge to keep a branch in every town or city that currently has one for at least the next two years and announced it would launch a current account for small businesses.
The bank’s chief financial officer, Mark Rennison, said the bank’s capital position and strong performance this year meant it could invest with confidence and stressed the bank continued to offer its members competitive mortgage and savings rates.
imogen.tew@ft.com
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