Nationwide warns of 'intense' mortgage competition as Q1 profits fall

Nationwide Building Society warned of a subdued UK housing market and fierce mortgage product competition as first quarter pre-tax profits fell 12.73% to £281m pounds.

Gross mortgage lending rose 3.7% to £8.4bn as the British lender kept its outlook for the full year unchanged, noting it expected the housing market to remain relatively subdued despite a forecast of modest UK economic growth over the next year.

Nationwide's chief financial officer Mark Rennison told Reuters that the group's net interest margin, which fell to 1.28% during the period from its previous 1.35%, was expected to continue on its downward spiral over the next 18 months as rivalry in the mortgage market necessitated the bank offer up more competitive deals.

Chief executive Joe Garner said he expected "intense competition to persist in our core markets".