Nationwide reports rise in profits on mortgage demand

Nationwide reported a 17% rise in pretax profit to £361m.

The lender had a resilient performance for the first half of the financial year, which was boosted by strong demand for buy-to-let mortgages.

Chief financial officer, Chris Rhodes, commented: “It is pleasing to see the benefits of our conservative approach feed through into the results for the half-year.”

“Our margin has stabilised, costs have reduced and profit is stable compared to the same period last year, despite a rise in impairment charges associated with the pandemic and the current uncertain economic outlook.”

The housing market came to a standstill over lockdown, however, has since recovered and mortgage approvals in September were 39% higher than the year previously.

Chief executive Joe Garner said: “It is very hard to predict what will happen to the economy, jobs and the housing market in the near future as a result of the pandemic and Brexit.

“While there are many uncertainties ahead, Nationwide faces into them from a position of considerable strength. We have steady profits, stable income, a strong balance sheet, and a strong capital position.”

Looking forward, Nationwide has warned of the many uncertainties ahead.

Earlier this month, the group warned of the likely slowdown in the housing market.

Robert Gardner, Nationwide’s chief economist, said: “activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires in March.”