Nationwide profits almost double as cost savings come through

Building society Nationwide’s profits nearly doubled last year as it improved its interest income and cost savings helped margins.

Underlying profits rose to £790mln (£469mln), though bad debts remained high at £190mln.

Nationwide also saw its share of UK mortgage lending slip to 12.5% from 12.9% as the amount it advanced dropped to £29.6bn from £30.9bn.

The building society said deposits grew by £10.6bn as money in current accounts increased though this was less than others in the market and its share of balances fell.

Chris Rhodes, chief financial officer, said: “On financial performance, our interest income and margin improved and we also reduced our costs. Although arrears remain low today, unsurprisingly, provisions for loans that might not be repaid have remained elevated, in light of the uncertain economic times ahead.

“Our member financial benefit – the extra value we give to members as a mutual – was lower than our £400mln target, having significantly exceeded it in recent years. In the medium term, we expect member financial benefit to exceed £400mln a year again.”