Nationwide announced plans to pull out of commercial property lending as it reported falling profits today.
Statutory profit for the six months to September came in at £696m, down from £802m. And underlying profit was reported at £615m, down from £801m.
Nationwide said gross mortgage lending was up 17 per cent to £17.5bn and the company said net mortgage lending of £6bn, up 46 per cent, was its best ever.
The building society also boasted helping a record number of first-time buyers, with 38,600 mortgages, up 50 per cent.
Why it’s interesting
Nationwide said today that, following a strategic review, it is to stop lending to new and existing commercial real estate (CRE) customers.
Chief executive Joe Garner said that the review found "our resources would be better deployed elsewhere".
We will maintain a dedicated service for each existing CRE customer throughout the remainder of their loan term. We will continue to provide funding to registered social landlords and existing project finance customers as well as continuing our business savings proposition.
Nationwide said the profits dip was in line with expectations, as it endures a “continued margin pressure due to the prevailing low interest rate environment”.
The company also emphasised that profits were hit by “conscious decisions we have taken over recent years to support our members” and trumpeted its customer service achievements.
On its outlook for the housing market, Nationwide reported a modest slowdown in activity since the UK’s Brexit vote, but said demand and supply are well matched.
Nationwide also said that while uncertainty in the economy may soften demand, “prices will continue to be supported by low interest rates and limited supply of new homes”.
What the company said
Chief executive Joe Garner:
Nationwide's strong capital position and commitment to continue to deliver the best service on the high street mean we are well placed to continue to support members whatever the prevailing economic conditions.