Profits at Nationwide building society soared by 141% in the three months from April to
The society said its first-quarter profits jumped from £105m to £253m, boosted by an increase in current account customers switching from other banks, and higher deposits by members.
But the rise comes despite a steep fall in lending volumes. During the quarter, the society lent a total of £5.8bn, down from £6.4bn compared to the same quarter last year. Net lending – which paints a truer picture as it strips out the effect of people paying off their loans or simply remortgaging – was down even more, falling from £2.6bn to £1.7bn.
Nationwide is the biggest lender to first-time buyers in the
The figures will add to the debate over the impact of the
Nationwide said that although the review had some impact, its mortgage volumes reflected an exceptional quarter last year, when few other lenders were in the market.
The society is powering ahead in the current account market, opening 110,000 new accounts during the period, taking its market share from 6.2% to 6.4%. Some of the customers joining Nationwide were former Co-operative Bank customers seeking a mutual alternative to the troubled bank, although Nationwide said it had success with former customers from every bank, obtaining a 10% share of the "switching"market.
Deposits by members rose by £1.5bn to £132bn, helping the society to increase its core capital strength measures. Its key ratio, CET1, rose to 16.3% from 14.5%, which is substantially above the minimum required. The improvement comes partly from the society's continuing reduction in commercial loan balances, and no extra provisions for compensation such as PPI (payment protection insurance).
"In line with our focus on customer service we have sustained our position as number one for customer service satisfaction, where our lead over our high street peer group has increased over this period."
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