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British lender Nationwide's profit drops 16 percent as low rates bite

Published 10/02/2017, 08:53
© Reuters. Pedestrians pass a Nationwide building society in London

LONDON (Reuters) - Britain's Nationwide Building Society said that pretax profit for the first nine months of its financial year fell by 16 percent year on year as increasing competition and low interest rates continued to pressure earnings.

Nationwide, Britain's second-biggest mortgage provider, boosted lending to homeowners by 11 percent to 26.2 billion pounds ($32.8 billion) in the nine months to Dec. 31 thanks to rising deposits from its savers.

However, the net interest margin, which reflects the gap between what the society pays savers and what it charges borrowers, declined to 1.33 percent from 1.56 percent in the same period a year earlier and Nationwide said it expects low rates to continue to squeeze margins.

In a further sign of the worsening outlook for the British economy, Nationwide said it booked 111 million pounds of provisions against losses on loans for the nine months, up from 9 million pounds in the same period the previous year.

© Reuters. Pedestrians pass a Nationwide building society in London

($1 = 0.7996 pounds)

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