Nationwide grows despite tough market

NATIONWIDE Building Society gained market share and grew underlying profits by almost a third in the past year despite ongoing housing market stagnation, it said yesterday.

Nationwide, the UK’s biggest building society, turned a £276m underlying profit in the year to April, up from £212m in April 2010, against a backdrop of low growth in both its core savings and mortgage markets.

It emphasised its efforts to support first time house buyers and savers and said it needed to allocate only £16m to compensate customers for mis-sold payment protection insurance, following the high court ruling last month.

Bad debts on its loan book also fell by 35 per cent over the year, to £359m from £549m in 2010, while only 0.68 of its own-originated mortgages were more than three months in arrears.

“We have achieved significant growth in our franchise against a backdrop of smaller mortgage and savings markets and an abnormally low interest rate environment,” said chief executive Graham Beale.

However, its reported profit fell slightly to £317m from £341m in 2010 due to accounting changes.

Nationwide said its market share in residential property rose to 9.5 per cent, up from 8.7 per cent in 2010, as it lent a gross £12.8bn. More than a fifth of that was lent to first-time buyers. It had also expanded in the current account market to a 6.1 per cent market share, up from 5.6 per cent in 2010, after new accounts jumped 118 per cent in the year, to more than 5m.

FAST FACTS | NATIONWIDE

Underlying profits up 30 per cent to £276m.
Bad debts on loans fell by 35 per cent to £359m in the year to April from £549m in 2010.
Loaned £12.8bn in residential mortgages, giving it a 9.5 per cent share of the UK market