LONDON (Reuters) - Britain's Nationwide Building Society
Nationwide said the CRE business, which accounts for 2.7 billion pounds ($3.35 billion) or around 1 percent of its assets, was no longer key to its strategy and that it had been scaling back the operation before June's Brexit vote.
"Since the EU referendum expectations for commercial property values have moderated and most forecasts are predicting modest falls," Nationwide said. The business which is closing focused largely on lending to low-risk property in Britain.
British property companies have seen the value of their retail and office portfolios slip in the aftermath of the vote to leave the EU, which has increased economic uncertainty.
Nationwide Chief Executive Joe Garner, who took the role earlier this year, said that the closure would result in fewer than 100 jobs being affected, and that the company would try and find new roles for those staff at risk of being cut.
Nationwide said underlying profit fell to 615 million pounds ($762 million) from 801 million a year earlier, as persistently low interest rates bit into returns from its main mortgage lending business.
"Our profit performance has reduced in line with our expectations and reflects continued margin pressure due to the prevailing low interest rate environment," Garner said in the statement.
Nationwide said it had seen little wider impact on business from Britain's vote to leave the European Union, in line with other major British lenders which last month defied expectations of an immediate squeeze on earnings.
Prime gross mortgage lending in the first half of the year grew by nearly a quarter to a record 14.7 billion pounds, Nationwide said. ($1 = 0.8071 pounds)