Nationwide Building Society warns of intense competition as profits slip
The lender said it was up against tough comparative figures from a year earlier.
Nationwide Building Society has reported a 12% drop in first-quarter profits and warned of “intense competition” and a subdued housing market in the months ahead.
The lender said statutory pre-tax profits fell to £281 million in the three months to June 30, from £322 million over the same period last year.
However, the bank said it was up against tough comparative figures, with last year’s numbers boosted by its £26 million VocaLink disposal.
Underlying profit for the period was also lower however, down from £301 million to £270 million.
The number of new accounts opened over the period was 186,900, down from 202,000 a year earlier, though member deposit balances grew by £4.2 billion thanks to a strong performance from Individual Savings Accounts (ISA).
Gross mortgage lending rose 3.7% to £8.4 billion
Nationwide Building Society chief executive Joe Garner said he expects tough competition in the months ahead.
“Our outlook is unchanged from the full year, and we expect the economy to grow at a modest pace over the next 12 months.
“We are observing consumers adapting their behaviours in response to the pressure on disposable income.
“The housing market looks set to remain relatively subdued with house prices broadly flat in 2018. Against this background, we also expect intense competition to persist in our core markets.”
Nationwide said costs for the year were in line with expectations, adding that it remains “committed” to its efficiency programme.
The building society is currently targeting savings of £300 million by 2022, and said it would update on its progress during interim results in November.