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Nationwide's profits plummet by 23% after bid to protect savers from low interest rates


Defence: Joe Garner

Defence: Joe Garner

Defence: Joe Garner

Nationwide Building Society has seen its annual profits tumble by nearly a quarter after it moved to protect savers from rock-bottom interest rates.

The mutual, which has more than a dozen branches in Northern Ireland, reported a 23% plunge in underlying pre-tax profits to £1.03bn for the year to April 4 after it was hit by the Bank of England's decision to slash rates to 0.25% last summer following the Brexit vote.

Nationwide said it gave members a £505m boost by keeping its savings deposit rates higher than rivals while passing on the base rate cut to mortgage borrowers in full.

Its move to protect savers helped see the group's deposit balance surge by £5.8bn, while it notched up record membership of 15 million.

On a bottom-line basis, profits fell 17.6% to £1.05bn, but the group insisted profits remained within its target range.

Chief executive Joe Garner said: "As a member-owned organisation, we don't seek to maximise our profits, but to manage them in our members' interests.

"We make conscious choices about how we distribute our profitability between strategic investment, capital generation and member financial benefit."