Nationwide announces hike in profits

The building society was helped by a 35 per cent reduction in provisions for bad debts, to £359m, as well as a cost-cutting drive, saving around £5m.

Chief executive Graham Beale, above, described the performance, in which underlying profits rose to £276m in the 12 months to April 4, as another strong year for the group.

He added that Nationwide’s £16m provision to cover compensation claims for the mis-selling of payment protection insurance compared “very favourably” with the several billions of pounds announced recently by banks.

With its own performance linked to how the UK as a whole performs, Nationwide said it believed the economic recovery remained fragile.

It expects the return of interest rates to more normal levels will be gradual.