Business

Nationwide profits slip in first quarter as outlook remains unchanged

Nationwide said its profits declined in the first quarter, although the building society said its outlook for the year remained unchanged.

The figures

Before tax profit dropped 13 per cent from £322m to £281m in the quarter up to 30 June 2018.

Nationwide assets came in at £236bn, up from the previous quarter's total of £228.9bn.

It said gross mortgage lending increased 3.7 per cent to £8.4bn, while member deposit balances grew by £4.2bn due to a strong ISA performance.

The number of cases more than three months in arrears improved marginally, by 0.33 per cent.

Why it's important

Last time Nationwide reported back in May, it said mortgage lending had reduced amid a "fiercely competitive" market, so the upturn in borrowing this quarter will be a welcome relief.

This quarter, building society said intense competition and low interest rates once again had a negative impact on business.

It has seen repeated falls in quarterly earnings, and has turned its eye to home loans after cutting product lines such as car insurance last year.

Nationwide is still the UK's top choice for current accounts, opening more than any other brand.

Nationwide Building Society chief executive, Joe Garner said:

Our outlook is unchanged from the full year, and we expect the economy to grow at a modest pace over the next 12 months. We are observing consumers adapting their behaviours in response to the pressure on disposable income.

The housing market looks set to remain relatively subdued with house prices broadly flat in 2018. Against this background, we also expect intense competition to persist in our core market

Read more: Nationwide House Price Index ticks up – but economists urge caution

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