Nationwide, the country’s second-largest mortgage lender, had a record first half with gross mortgage lending up 14% to £14.9 billion.
Underlying pre-tax profits rose by 27% to £801 million. This helped the balance sheet strengthen with the key core tier one ratio up from 19.8% in April to 21.9% at the end of September.
In a rarity since the financial crisis it also reported no impairments with modest writedowns on home lending being more than matched by writebacks on commercial lending.
Nationwide's outgoing boss Graham Beale (Picture: Nationwide)
Nationwide
Beale said: “It’s surprising and not surprising. It is what I would expect from a building society because we don’t take risks. We don’t have the growth-driven model which HBOS turned into.”
He said yesterday’s report into the collapse of HBOS highlighted the importance of retaining mutuals like Nationwide.
He said: “That report cost £7 million and took God knows what length of time to produce. Yet it doesn’t tell you anything you couldn’t surmise beforehand.
“If you look at the first half of the 1990s and all those building societies like Halifax… and Northern Rock, which demutualised and then collapsed in the financial crisis, I do wonder what might have happened to the economy if they had not converted. Mutuals really are different from banks.”
Beale is still unhappy that Chancellor George Osborne included his organisation in his 8% bank profits surcharge tax in the summer Budget calling it “a missed opportunity to support diversity in UK financial services”.
