NATIONWIDE’S profits were cut almost in half as the building society joined Britain’s banks in increasing its payment protection insurance compensation provisions, as well as recording losses on housing loans in its first half results published yesterday.
The building society yesterday confirmed it would like to buy the 316 branches RBS is being forced to offload as part of its 2008 bailout, which would provide Nationwide with 250,000 small business customers.
“Strategically we want to enter into the SME space. If there is anything I could do that would accelerate our strategy it would be of interest,” Nationwide chief executive Graham Beale told Reuters. “RBS is something which we will watch very carefully.”
He added Nationwide could easily afford the purchase, arguing “we’ve got one of the strongest solvency ratios in the industry”.
RBS had hoped to sell the branches, alongside 1.8m customer accounts, to Santander for £1.65bn. But the deal dragged on for two years and collapsed last month.
Analysts believe it could buy the branches for £500m, down from the £1.65m Santander considered.
Nationwide reported profits of £124m in the six months to September, down 47.9 per cent on the £238m recorded in the same period of 2011.
Part of the hit came from a PPI provision hike of £45m, taking the total so far to £173m. Losses on commercial property continued to mount, hitting £193m in the six month period compared with £72m a year ago.
More positively, gross mortgage lending was up 15 per cent to £10.2bn.