Lending boom doubles profits
PROFITS at the Nationwide Building Society more than doubled after it stuck with mortgage lending early in the Covid crisis.
The onset of the pandemic saw a number of lenders pull back from offering home loans.
But by keeping going, the Nationwide won new business and made more in interest on those mortgages it approved.
Britain’s biggest building society said that it helped underlying profits soar from £305million to £850million in the six months to the end of September.
Chief executive Joe Garner said: “Over the last six months we have focused on providing highly competitive products for our mortgage and savings members.”
The Nationwide’s gross mortgage lending rose by £5.5billion to £18.2billion over the period, although growing competition saw its market share slip from 12 per cent to 11.4 per cent.
The building society’s net interest margin – a key measure of the difference between what providers make from lenders and paying savers – rose from 1.15 per cent to 1.24 per cent.
Finance chief Chris Rhodes predicted this margin would fall back over time. With Covid lockdowns curtailing many people’s spending, Nationwide took £7.1billion of deposits over the six months – compared with £1.3billion the same time last year.
The mutual’s ISA products proved popular, with them accounting for almost 30 per cent of those opened among its “peer group” during that six months.
The results were also helped by the release of £34million the Swindon-based provider had set aside to cover any possible losses caused by the pandemic.
The Nationwide has struck a different tone than rivals by backing high street branches.
A “Branch Promise” states that the building society will keep at least one outlet in every town or city it is in today, until at least 2023.
Some branches have switched to reduced opening hours.
But Mr Garner insisted: “We hope this will help branches continue to play a key role in serving our members in the future.”