Nationwide continues run of good form as it reports pre-tax profits up a third

 
James Nickerson
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Nationwide Building Society Announce Rate Cap
Some 250,000 new accounts were opened during the six month period (Source: Getty)

Nationwide building society continues to benefit from a strong housing market and customers switching current accounts, posting pre-tax profits up by a third.

The figures

Pre-tax profits for the six months to 30 September rose by 34 per cent to £802m, up from £598 in the same period a year ago.

There were more than 250,000 new accounts opened in the period, up 13 per cent.

A key part of Nationwide's business, mortgage lending, was up 14 per cent at £14.9bn, while savings deposits were reported at £2.6bn.

Why it's interesting

A strong set of results, indeed: This was Nationwide's best ever half year of mortgage lending along with a strong inflow of savings and the opening of over a quarter of a million new current accounts.

The company said: "Our first half performance reflects the growing strength and security of the Society with all of our core product areas delivering standout results."

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The building society has benefited from housing market activity having increased over the course of 2015, and while shifts in interest rate expectations may have some impact on the housing market, "a strengthening labour market underpinning a continued economic recovery should support both activity and house prices, with the latter also receiving support from the chronic under-supply of houses for sale", the company said.

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Meanwhile, Nationwide has managed to lure customers from banks who are seeking to get a better deal by switching current accounts.

Chief executive Graham Beale will step down next year to be replaced by current chief executive of BT Openreach Joe Garner.

What Nationwide said

Beale said:

We have also continued to deliver better customer satisfaction than our high street peer group, achieved excellent financial results and further improved our capital position. All this has been achieved in the face of fierce competition and by continuing to invest in innovative services and long term good value products for new and existing members.

This confirms that we are the genuine alternative to the banks for those customers looking for a broad range of good quality products and leading customer service. Mutuals, like Nationwide, are different from the banks. We serve a social purpose by providing a safe home for savings and finance for home ownership. Nationwide is evidence that you can be successful by doing the right thing.

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