Nationwide interim profit slumps 33%
Nationwide posted a 33% slump in interim profit on Friday as it took a hit from payment protection insurance claims.
In the six months to 30 September, underlying pre-tax profit fell to £307m from £460m in the first half of last year, while statutory profit declined to £309m from £516m. The building society put this down to lower income and increased investment costs, along with additional PPI charges.
Net interest income came in at £1.39bn, down from £1.44bn the year before and Nationwide highlighted an additional provision for PPI redress of £36m as claims spiked ahead of the end of August deadline.
Nationwide’s net interest margin dipped to 1.12% from 1.23% in 2018 as a result of reduced net interest income and a larger balance sheet, driven in part by growth in cash balances, and an increase in the value of hedging derivatives reflecting the weakening of the pound.
"The UK’s growth has slowed as a result of weaker global growth and Brexit uncertainty, but household spending has remained relatively solid, and housing market activity broadly stable at subdued levels," it said.
"Whilst the economic outlook remains uncertain, we expect the current low interest rates and competition in our core markets to continue."