Nationwide Building Society reported underlying profits increased in the first half to £980mln from £850mln last year as rising interest rates supported growth in total underlying income to £2,190mln from £1,894mln.
Net interest margin improved to 1.48% from 1.24% and total gross mortgage lending grew by £1.5bn to £19.7bn with net lending of £5.4bn.
Credit impairment charges increased to £108mln compared to a release of £34mln last year but the building society said: “We have not yet seen a significant increase in arrears; however, higher interest rates, rising inflation and the uncertain economic outlook remain key risks.”
“Our balance sheet remains strong, with Tier 1 capital resources increasing by £0.5bn, a leverage ratio of 5.8% and CET1 ratio of 25.5% (4 April 2022: 5.4% and 24.1% respectively),” Nationwide said.
Chief executive Debbie Crosbie said: "Nationwide is not immune to the current economic challenges and it's important to maintain financial strength.
“The economic outlook remains highly uncertain, with increases in the cost of living and higher interest rates for borrowers putting further pressure on household finances and reducing consumer confidence.
“This is expected to lead to lower mortgage market activity in the second half of the year.
“These factors are fully reflected in the economic scenarios used within our credit loss provisions,” Crosbie said.