Nationwide profits soar as lender benefits from mortgage boom
Bosses at the mutual said pre-tax profits for the six months to the end of September hit £853m compared with £361m a year earlier.
The building society said the increase in profits was driven by its decision to keep lending at the start of the pandemic while rivals pulled back.
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Hide AdNationwide is the second-biggest mortgage lender in the UK after Lloyds, with gross mortgage lending during the period rising by £5.5bn to £18.2bn, although its market share fell slightly from 12 per cent to 11.4 per cent.
More than £5bn was lent to first-time buyers, the mutual added. Profits were also boosted by the release of £34m of the £139m held back in provisions during the pandemic.
Net interest margins rose from 1.15 per cent to 1.24 per cent, although finance chief Chris Rhodes said the higher levels would fall back over time and were “a bit of a one-off”.
He added: “During the pandemic, strong demand for mortgages, coupled with macro-economic uncertainty, led to higher margins on mortgage lending.
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Hide Ad“This resulted in significantly higher income, and a very strong overall financial performance.
“Net interest margin improved, but is unlikely to be sustained at this level in future due to intense competition in the mortgage market.”
The lender’s ISA savings products also performed strongly and deposits rose by £7.1bn in the period.
Joe Garner, the chief executive, said: “Early in the pandemic we made decisions to stand by our members and to protect our financial strength. This year we continued to support our members and have delivered a very strong half-year performance, with capital reaching an all-time high.
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Hide Ad“As a mutual, profits are retained to invest in the society for the benefit of its members and wider society over the long term.
“Over the last six months we have focused on providing highly competitive products for our mortgage and savings members. These have been very popular, resulting in a successful ISA season, increased deposits, higher mortgage lending, and a larger share of the current account market.”
He added: “We continue to focus on providing the high-quality personal and digital service our members expect of us, and have led our peer group on satisfaction for over nine years."
“Our success is a testament to the strength of our mutual business model.”