Nationwide first-half profits up 26%

Britain’s largest building society, Nationwide, has today posted a surge in first half profits.

Nationwide said pre-tax profits for the six months to September 30 were £147 million, up from £117 million in the same period a year ago.

The company, which is the country’s second-biggest mortgage lender, added that bad debts dropped by 44% to £179 million as lending remained tight.

Meanwhile, it said it is cautious about the future prospects of the housing market and said this area will remain weak as the Government’s spending cuts kick in.

However, it added that severe falls in volumes are unlikely as a result of historically low interest rates.

Commenting on today’s figures, chief executive, Graham Beale, said: “This is another strong performance from Nationwide, with underlying profit up 26% when compared with the first half of last year.

“We have maintained our strong balance sheet, excellent capital ratios ( Core tier 1 12.5%, Tier 1 15.8%) and strong consumer franchise. Our focus on the needs of our members has resulted in us performing well in our core markets.”

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.

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