Nationwide has posted a 46 per cent decrease in its annual profits - a drop which it attributes to falling interest rates . Pre-tax profits dropped to £212 million for the year ending 4th April, down from £393 million a year before. In light of the figures, the building society refused to rule out branch closures, saying it was necessary to assess the efficiency of its branch network. Furthermore, Nationwide will also consider making cuts to its administration centre network as it looks to meet cost targets.
The building society revealed that it expects to see the lower profit levels continue into the next financial year, as the low interest rates provide savers will little incentive to deposit their money into bonds or savings accounts .
Meanwhile, Nationwide's share of the mortgage market fell slightly in 2009, down from 9 per cent to 8.7 per cent. Mortgage lending totalled £12 billion, while arrears amongst residential mortgage customers increased but remained lower that the industry average. Members of the Council of Mortgage Lenders are currently experiencing an average of 2.22 per cent of accounts in arrears, compared with 0.68 per cent at Nationwide.
Lower Interest Rates Harming Profits of Banks and Building Societies
Financial Services > e-banking > Banking news
Lower Interest Rates Harming Profits of Banks and Building Societies
Wed, 02 Jun 2010
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