Nationwide blames 'sustained economic uncertainty' as profits slump 16%

Britain's second-biggest mortgage provider said it expected continued pressure on margins

In a further sign of the worsening outlook for the British economy, Nationwide said it booked £111m of provisions against losses on loans for the nine months (Getty)

Nationwide Building Society said that pretax profit for the first nine months of its financial year fell by 16 per cent 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 per cent to £26.2bn in the nine months to 31 December 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 per cent from 1.56 per cent 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 £111m of provisions against losses on loans for the nine months, up from £9m in the same period the previous year.

The company said it expected continued pressure on margins and profit, with chief executive Joe Garner flagging "sustained economic uncertainty".

Reuters