Nationwide unveils surge in first-half profits

PROFITS at Nationwide building society have soared as a newly booming housing market has seen the mutual achieve its highest half-year mortgage lending for five years.

Nationwide boss Graham Beale talked up mutual model. Picture: Complimentary

Nationwide’s new mortgage lending leapt well over one-third to £14 billion in the six months to end-September, helped by government initiatives such as Help to Buy. A surge of customers switching their current accounts to the group also helped drive the robust first-half performance, with underlying operating profits rocketing 155 per cent to £332 million.

Nationwide said it opened more than 214,000 new current accounts and saw 54,000 customers switch to the group. It said its share of new mortgage lending rose to 15.4 per cent from 14.4 per cent a year earlier, while net lending – loans less repayments – leapt 75 per cent to £5.6bn.

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Chief executive Graham Beale said it had been an “excellent” first half and said the group was on track for a strong performance in the second half.

He said the finance sector was also being helped by access to cheap finance through the state-backed Funding for Lending scheme, as well as economy-boosting measures under quantitative easing (QE).

But he added that Nationwide was also attracting customers from its banking rivals, with its share of the current account market rising from 5.2 to 6 per cent.

The group claimed its results proved the mutual model – where a company is owned by its customers – can be successful in retail banking, amid fears that the woes at the Co-operative Banking Group had tarnished the sector’s reputation.

“We are making tangible progress in growing our market shares and continue to demonstrate that we offer a real, consistent and viable alternative to the UK banks. In short, we are a really serious competitor,” Nationwide said.