Britain’s biggest building society saw its underling pre-tax profits jump to £980m in the half-year to September 30, up from £850m the previous year. Higher interest rates – which have particularly affected the mortgage market in recent months – meant the lender saw its total income swell by £296m over the period.

But Nationwide said it was ramping up its credit impairment charges in anticipation of future increases in arrears as people face affordability pressures.

However, the building society stressed that it has not yet seen a significant increase in its customers missing payments because many of its borrowers remain on fixed rates.

Chris Rhodes, Nationwide’s chief financial officer, said: “The sustained strength of our finances will allow us to support our members through a highly uncertain period and significant cost-of-living increases.

“We have continued to support our members’ borrowing and savings needs during the period, and as a result have delivered growth in our mortgage and deposit balances.

“Due to the highly uncertain economic outlook, it is important that we maintain our financial strength and continue to focus on efficiency.

“This will mean we can face the future with confidence and continue to support our members.”

Debbie Crosbie, chief executive of Nationwide Building Society, said:

"Nationwide's focus is on supporting members, today and for the long term.

"We continue to deliver competitive products, high-quality services and great customer experience. Nationwide has remained number one for customer satisfaction in our peer group for more than 10 years.

"Our half year performance means we can invest more in new ways to support members; we have increased the current account switcher incentive and extended our support for members facing increases in the cost of living, including practical support provided in our branches, a dedicated telephone hotline and an online support hub.

"Nationwide is not immune to the current economic challenges and it's important to maintain financial strength. Our strategy is focused on growing the membership base, increasing value to members, and becoming simpler and more efficient in the way we operate. This will ensure the society's future strength and ability to continue to support members and wider society."

Nationwide Building Society posts higher profits as it warns over a decline in mortgage market