Nationwide's profits drop to £1bn following Bank of England's interest rate cuts

 
Shruti Tripathi Chopra
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Nationwide Building Society Announce Rate Cap
Nationwide is the UK’s largest building society (Source: Getty)

Nationwide's statutory pre-tax profits for the year to March fell 17 per cent following its efforts to safeguard customers from the Bank of England’s interest rate cuts.

Nationwide warned that consumers are "alert to the economic uncertainties ahead" and cited the Brexit negotiations, low interest rates and inflation as concerns.

"However, households remain relatively optimistic about their own finances, and are going about their daily lives as normal," the building society added.

Read more: Annual house price growth is at its slowest rate in nearly four years

The figures

Profits at the building society stood at £1.054bn, down fom last year's figure of £1.279bn.

However, Nationwide opened 795,000 accounts during the year and accounted for one in seven current accounts opened in the period.

The mortgage lender also revealed it returned £505m in value to its members through efforts including maintaining the five per cent interest rates on some of its products.

Nationwide also lent a record £33.7bn during the period compared to £14.7bn lent in the first half of the year.

Read more: Nationwide pulls out of commercial real estate lending

What Nationwide said:

Joe Garner, Nationwide’s chief executive, said: “Our members have benefitted by over half a billion pounds from our commitments such as paying higher rates of interest and charging lower fees than our major high street competitors. At the same time we delivered strong profitability, robust financial strength, and continued to invest in the business.

We made a conscious decision to support those saving regularly and aspiring to get onto the housing ladder and our mutual model enabled us to do this without affecting what has been a high performing year. It is the combination of that value and our focus on customer service, where we are rated number one for customer satisfaction among our high-street peer group, which helped Nationwide grow membership to an all-time high.

While we saw record use of online services driven by our mobile banking app, we know that members value our branch network, which is why we are investing £80m in upgrading branches this financial year. We have also opened a branch in Glastonbury, Somerset, which has been left without a bank, to test the viability of opening branches with community support. If successful, we may choose to invest in other communities.

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