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May 26, 2010    

Nationwide reports 46% slump in profits

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by Kay Murchie

Nationwide Building Society has today announced a fall in annual profits.

The UK’s largest building society said underlying pre-tax profits fell to £212 million for the year to 4 April, compared with £393 million in the same period a year earlier.

The company said it expects the “lower levels of profitability” experienced in the last 18 months to continue into 2010-11 and will introduce measures to help limit profit declines, which could see further job losses and branch cuts.

Last year, the group reduced headcount by around 800 and closed a dozen branches, but this was partly due to overlap following many takeovers in the last few years.

The Nationwide acquired Cheshire and Derbyshire building societies and it also took over Scotland’s Dunfermline’s savings assets in March 2009.

Meanwhile, it experienced negative net residential mortgage lending of £3.6 billion in the period, while seeing £8.2 billion in net outflows of savings business.

Bad debts grew to £549 million from £394 million a year ago, however, this was attributed to commercial property loans turning sour.

Meanwhile, its share of the mortgage market fell slightly to 8.7% from 9% in 2009.

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