Nationwide seizes market share
THE NATIONWIDE is grabbing more current account and mortgage customers from the big four banks, the building society revealed yesterday.
The growth pushed up profits as the lender’s interest margins improved.
Nationwide made £21.6bn of mortgage loans in the nine months to December, up 34 per cent on the year.
The growth is faster than that in the market overall, increasing the mutual’s market share from 13 per cent a year earlier to 15 per cent now, cementing its place as the UK’s third-largest mortgage lender.
Once repayments are taken into account net mortgage lending increased 58 per cent to £8.4bn.
The seven-day current account switching scheme has given the lender a boost – 316,000 new current accounts were opened in the period, up 20 per cent on the same nine months of 2012.
The mutual maintained its market share of six per cent of accounts.
Fierce competition has seen rivals like HSBC’s First Direct brand offer £125 for new accounts, and others like NatWest and Santander give cash back to customers on some purchases.
The Nationwide’s offering gives interest rates of five per cent on some current account balances.
In the latest three months its capital ratio improved 1.2 percentage points to 11 per cent and the leverage ratio 0.3 percentage points to 2.3 per cent.
Those improvements were driven by the issuance of £550m of core capital deferred shares, a unique new equity instrument, as well as holding onto profits.
The building society’s profits increased almost four-fold, coming in at £378m for the nine-month period.