Nationwide posts strong profit growth as mortgage lending reaches pre-recession levels
Nationwide lent more money to house-buyers last year than it has done since the financial crash starting in 2007, helping the society to post strong profit growth.
The figures
Gross mortgage lending at the building society was up 20 per cent to £32.6bn, as the firm helped 57,200 first time buyers into a home of their own.
The business was ranked number one for customer service satisfaction amongst its high street peer group again this year – extending its lead to 7.7 per cent.
Nationwide has also expanded its current account base with 525,000 new accounts – up 12 per cent on 2015. It is a net gainer in current account switching – up 38 per cent.
All that meant underlying profit was up nine per cent to £1.4bn, while statutory profit rose 23 per cent to £1.3bn. The lender's CET1 capital ratio rose to 23.2 per cent, from 19.8 per cent last year.
Why it's interesting
Things are looking rosy in Nationwide's world.
The group has warned of "uncertainty surrounding the EU referendum and the global economic outlook" would be likely to have some impact on UK economic activity in the near future.
However, it added: "We expect the housing market to remain resilient, with any dampening of activity from modest increases in interest rates offset by a strengthening labour market and an under supply of housing."
What Nationwide said
Nationwide's new chief executive Joe Garner said: “Nationwide has demonstrated that outstanding customer service is the most sustainable path to excellent business performance. It's a credit to the management and people of the Society that they have consistently understood this and organised Nationwide around this principle.
"As a result, last year we lent more money to help people into a home of their own than since before the financial crisis in 2007. More people are also choosing to manage their money with Nationwide, with over half a million new current accounts opened in the year. And our loyalty accounts and regular savings offering has led to an increase in member deposit balances of £6.3bn.
“It is my privilege to have been asked to lead an organisation which has consistently demonstrated that it is possible to be successful by doing the right thing. Our mutual status creates an ownership model that allows us to take a long term view and make decisions in the best interests of our members. This, and our talented people, is Nationwide’s strength and our opportunity.”
Nationwide chairman David Roberts said: “These results are a testament to always putting our members first. I would like to thank Graham Beale for his huge contribution to the society, which has left the business in great shape, prospering as a modern mutual and I wish him well for the future.
"I am delighted to welcome Joe Garner as Nationwide’s new chief executive. Joe stood out as someone with a deep understanding of the sector, who has championed customer interest throughout his career, and who will set the strategic direction for the society and our people.”
In short
Nationwide is looking stronger than it has done since before the recession.