Credit crunch gloom for Nationwide Building Society

Nov 11 2008 by Peter McCusker, The Journal

NATIONWIDE Building Society has reported a drop in its pre-tax profits. The group said it made £322m in pre-tax profits in the first six months of its financial year, down 18% from £394m a year ago.

It also posted rising losses from borrower arrears and the credit market crisis.

Its bad debts rose by more than a fifth to £74m as borrowers struggled with repayments and Nationwide said it was forced to write down the value of assets by £416m. The mutual – the UK’s biggest building society – said its net residential mortgage lending plunged by more than two thirds from £3.6bn to £1bn.

Its share of the net lending mortgage market fell to 5.6% from 6.2% this time last year.

The Nationwide said the clampdown came as it sought high quality borrower business and aimed to trim lending to avoid turning to expensive wholesale money markets for funding.