Daily Express

Nationwide hit by fall in profit

- By David Shand

NATIONWIDE saw its annual profit fall by more than 17 per cent last year as it sought to protect savers from record low interest rates.

The UK’s biggest building society said it remained “comfortabl­y within our target profit range” despite handing back £505million to members as it kept rates on some savings accounts unchanged while passing on the Bank of England’s rate cut last summer to mortgage customers.

It took one in seven of all new current accounts opened in the year to April, up 35 per cent on the previous 12 months to 795,000, and also achieved record gross mortgage lending, up 3 per cent to £33.7 billion, as it helped one fifth of UK firsttime buyers on to the housing ladder.

Chief executive, Joe Garner, right, said keeping its deposit rates higher than those of rivals was a “conscious choice”. Nationwide’s profit fell from £1.28 billion to £1.05 billion.

He said: “As a member-owned organisati­on, we don’t seek to maximise our profits but to manage them in our members’ interests. Our success this year allowed us to improve our capital strength and continue to invest in growing the society.

“The combinatio­n of the low interest rate environmen­t and our decisions to protect savings rates for longer led to an exceptiona­l year for member value.

“We can make these choices thanks to our success in attracting and retaining members. We protected our savers with rates a third higher than the market average, leading to a growth in member deposits of £5.8 billion.”

Garner said that despite record use of online services, Nationwide is also investing £80 million this year in upgrading its 700-branch network.

It aims to deliver sustainabl­e savings of £300 million over the next five years, but Garner said there is no planned programme for large-scale redundanci­es.

Nationwide will stop selling car insurance to new customers from next month . It is also winding down its commercial lending business and will no longer offer inheritanc­e tax planning advice. Garner said: “It is not in the interests of our society to provide services which are not core to our business.”

He said Nationwide was not interested in buying the Co-op Bank, which is up for sale, “in its entirety”, but would not comment on whether it might look to acquire parts of it.

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