Nationwide more than doubled its pre-tax profit in the first half of its financial year, with the UK’s largest building society boosted by strong demand for mortgage lending.
Pre-tax profit was £850m for the six months to September, close to triple the amount for the same period in 2020. Total underlying revenue rose more modestly to £1.9bn, an increase of about 26 per cent year on year.
A number of UK lenders including Santander, NatWest and Lloyds also reported strong mortgage demand in their third-quarter results. However, analysts have warned that expected interest rate rises by the Bank of England could rein in borrowing and cool the property market.
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Nationwide’s mortgage lending increased by £5.5bn year on year to a total of £18.2bn for the six-month period, although its market share fell slightly. Garner said the “vast majority” of its mortgage customers were on fixed-rate deals, shielding them from the initial impact of any central bank rate rise.
The group lent to more than 30,000 first time buyers in the period, compared with 21,000 a year earlier.
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Chief financial officer Chris Rhodes said that “the only thing holding back the market is lack of [housing] supply”.
In line with other UK banks, Nationwide announced a net release of credit impairments of £34m, reflecting the stronger UK economy. Net charges for the same period in 2020 were £139m.
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