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Nationwide CEO Critical of Banking Regulation

Fri, 20 Nov 2009

Nationwide Building Society has revealed a drop in first half profits of more than 60 per cent. The banks underlying pre-tax profits for the six months to 30 September were £117 million, down from £322 million in the same period of 2008. Chief executive of the UK's largest building society, Graham Beale, was critical of regulatory changes in light of the figures. Mr Beale acknowledged the importance of building a secure framework for banking regulation, but suggested that the governments attempts to force the banking sector to build up greater capital reserves were limiting the ability of building societies such as Nationwide to access capital markets.

Nationwide have adopted a prudent approach to credit lending in the past six months, while the building society has not pursued a market share in the retail savings market which it believes it suffering from serious competitive distortion and uneconomic interest rates . As a result, it's balance of retail deposits fell by £5.6 billion, though it remains the second largest savings institution in the UK. Meanwhile, although the impairment charge for bad loans increased to £317 million, it should be noted that this figure is well below the industry average.
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