Nationwide's profits rise 54% to £1bn

Nationwide building society has reported a 54% rise in annual pre-tax profit to £1.04bn as it regained its position as the UK's second largest mortgage lender.

The building society reported £677m a year earlier. Nationwide also announced its chief executive, Graham Beale, would retire next year after nine years at the helm. It added it expected growth to moderate in the years ahead as the pace of house price growth eased.

Nationwide said the search for Mr Beale's successor would now begin. He served on the board of the building society for 13 years, becoming chief executive of Nationwide shortly before the financial crisis in 2007.

Net interest income - the income Nationwide receives from savings deposits and its own investments - rose £458m to £2.8bn, as a result of what the building society called "lower retail funding costs and the growth in retail assets". Nationwide said saving deposits grew by £1.9bn, despite what it called the "low interest rate environment".

It blamed lower interest rates on its savings account on the general drift downwards across the wider market. The building society said it took its responsibility to its savers "very seriously", but added it was "not immune from trading conditions in the savings and mortgage markets and the impact on prevailing rates".

Net mortgage lending - new mortgages advanced minus those repaid in full - amounted to £7.1bn in the year to 4 April, down from £9.9bn a year earlier, giving Nationwide a 31.2% share of the UK mortgage market.

Mr Beale said: "Nationwide is in great shape and is demonstrating how a mutual building society can make a real and refreshing difference in the financial services sector.

"Succession of leadership is best dealt with from a position of strength and hence the time has come for the society to identify and appoint its next chief executive. In the meantime, there is lots to do and there are exciting opportunities ahead, so it is very much business as usual."

bbc.com