Nationwide profits plunge 40%

Britain’s largest building society Nationwide said profits crashed to £469m in the year to April 4th, from £788m the year previously.

The company had already been seeing pressure on its profits from its investment in technology and payouts for payment protection insurance (PPI) before booking a £101m hit from Covid-19.

Nationwide said it would suspend repossessions of its mortgage customers in arrears for 12 months as part of its support measures for Covid-affected members.

Like all banks, it expects to see a surge in the numbers of people unable to make their interest payments.

Nationwide chief executive Joe Garner said: “In the last month of our financial year all our lives have been overshadowed by the coronavirus.

“We are helping members in financial difficulty with payment holidays on mortgages and loans and interest-free overdraft periods, and we have promised that no mortgage member will lose their home over the next 12 months due to the impact of the coronavirus.

“We’ve taken steps to protect our employees’ physical and mental health so we can maintain essential services to our members, and we’ve gone a step further and promised that everyone’s job is safe in 2020.”

The building society has also promised that no-one will lose their home in the next 12 months because of the impact of coronavirus.

Nationwide, one of the big players in the mortgage market, said total gross mortgage lending fell to £30.9m from £36.4bn last year, with its market share shrink to 11.4 percent from 13.4 percent last year.

Provisions for PPI increased to £56m from £15m last year due to higher-than-expected claims ahead of the deadline in August 2019.

Nationwide reported a core capital buffer of 31.9 percent, down slightly from 32.2 percent the previous year but still ahead of most major rivals.