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Nationwide Building Society posts 21% drop in nine-month profits, weighed by further technology investment costs

The mutually-owned group reported statutory profits of £703mln for the nine months to December, down from profits of £886mln for the same period a year earlier
Nationwide branch
Nationwide saw its third-quarter gross and net mortgage lending grow to £26.8bn and £6.1bn respectively

Nationwide Building Society has reported a 21% drop in nine-month profits, weighed by costs for a further ramp-up of the lender’s investment in digital banking.

The mutually-owned group reported statutory profits of £703mln for the nine months to December, down from profits of £886mln for the same period a year earlier as it booked a £167mln charge for technology investment.

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The firm saw its third-quarter gross and net mortgage lending grow to £26.8bn and £6.1bn respectively, up from £24.1bn and £3.9bn a year earlier.

On the savings side, it saw deposit balances rise by £5.9bn, after a £2.3bn increase a year earlier.

The group’s net interest margin, however, fell to 1.26%, down from 1.33% a year earlier reflecting intense competition in the home loans market.

Joe Garner, Nationwide’s chief executive, said: “Looking ahead to the fourth quarter, as consumers continue to benefit from considerable choice, we intend to remain competitive and thus expect that lending margins will continue to moderate.”

Nationwide, the third largest provider of home loans in the UK with a 13% market share, also said it has decided not to provide updates on its results for the first and third financial quarters in the future, saying such regular reporting is not consistent with its longer-term strategy.

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