Nationwide reports rise in underlying pre-tax profits

| May 25, 2011 | 0 Comments

Britain’s largest building society, Nationwide, has today posted a surge in underlying pre-tax profits.

Nationwide said pre-tax profits fell 7% to £317 million – primarily due to accounting changes.

However, underlying profits surged 30% to £276 million in the year to 4 April.

Meanwhile, the amount written off for bad loans to customers dropped by more than a third to £359 million.

Commenting on today’s figures, chief executive, Graham Beale, said: “This has been another strong year for Nationwide, during which we have recorded excellent financial results, further improved the strength of our balance sheet.”

The company, which is the country’s second-biggest mortgage lender, added that its core Tier 1 ratio (a key measure of financial strength) rose to 12.5% to 12.2%.

There has been much consolidation within the building society sector after Nationwide rescued Scotland’s Dunfermline Building Society in March 2009. It also rescued Cheshire and Derbyshire building societies in 2008.

Further consolidation within the mutual sector is expected in the medium-term.

Finally, the Nationwide is one of 14 UK financial institutions which could be in line for a possible downgrade, according to Moody’s Investor Services yesterday.

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