Nationwide suffers £41m drop in profits as it warns of subdued housing market

NATIONWIDE Building Society has reported a 12 per cent drop in firstquarter 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 £322m over the same period last year.

However, the society said it was up against tough comparative figures, with last year’s numbers boosted by its £26m Vocalink disposal.

Underlying profit for the period was also lower, down from £301m to £270m.

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 ISAS.

Gross mortgage lending rose 3.7% to £8.4bn

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,” he said. “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 it remains “committed” to its efficiency programme.

The society is targeting savings of £300m by 2022, and said it would update on its progress in interim results in November.