November 23 2014 Latest news:
The Nationwide Building Society has seen half-year underlying pre-tax profits fall 17% to £151million after it put by a further £45 million to settle claims relating to mis-selling of controversial payment protection insurance (PPI)
Tuesday, November 27, 2012
NATIONWIDE, Britain’s biggest building society, said today that its mortgage lending had soared to a four year high as the Bank of England’s £80 billion scheme helped reduce rates for borrowers.
Nationwide reported a 15% increase in gross mortgage lending to £10.2 billion in the six months to September 30, with loans to first time buyers nearly doubling.
But the mutual revealed its half year underlying pre-tax profits fell 17% to £151 million after it put by a further £45 million to settle claims relating to mis-selling of controversial payment protection insurance (PPI).
The further PPI provision has taken the total amount set aside by Nationwide to £173 million.
The society also said profits were hit as it suffered losses of £193 million on pre-credit crunch lending to the commercial property sector, compared with £72 million in loan losses last year.
Its lending figures will make for encourage reading at the Bank of England, which jointly launched the Funding for Lending scheme with the Treasury earlier this year in an attempt to help ease the flow of credit to mortgage and business borrowers.
Nationwide said net mortgage lending - which strips out loan redemptions and repayments - more than doubled in the first half, up from £1.4 billion to £3.2 billion, with almost a third of its lending in the first half to customers buying their first home.
Chief executive Graham Beale said: “We have continued to demonstrate that we are on the side of first time buyers by doubling our lending to this vital sector of the housing market and helping almost 20,000 borrowers into a home of their own.”
Nationwide said the Funding for Lending scheme, which offers cheap funding to banks and building societies on the condition they increase lending, was having a significant impact on mortgage pricing, with “very attractive” rates on offer.
He also confirmed Nationwide planned to start lending to small and medium-sized businesses in 2014.
He said: “Our plans are progressing well, and we are building the team and infrastructure we need to implement a strong and compelling offer in this sector.”