Nationwide Building Society reported a 33% fall in profit for the first half of its financial year, as it took a fresh charge for mis-selling insurance products and saw its interest margin fall.
The bellwether mortgage lender said its underlying profit fell to £307 million in the April-September period from £460 million a year ago.
Nationwide’s net interest margin - a closely-watched measure of underlying profitability - fell to 1.12%, down from 1.23% a year ago as competition in the mortgage market continues to bite.
Its membership rose to a record level of 3.5 million people.
Joe Garner, Chief Executive, Nationwide Building Society, said: "In line with our expectations, our profits were lower as we invested in meeting the needs of our members, in our service and in our future. As we announced in September, profits were also affected by an additional PPI charge.
"Our trading performance was in line with our plans. We continued to grow our mortgages, deposits and current accounts, but at a more moderate pace, as we focus on broadening relationships with our members and helping to meet more of their financial needs.
"Members benefited from £365 million in member financial benefit, as we chose to compete in the current low interest rate environment. We continue to prioritise service, maintaining our lead over our peer group for satisfaction, and pledging to keep a branch in every town we are in until at least May 2021. We are also investing heavily in the future of our Society, by upgrading our IT estate and transforming our digital capabilities over the next few years.
"As a member-owned building society we continue to make decisions in our members' interests, to give value to members and invest in the future."