Nationwide Q1 Results 2016/17

Highlights

12 August 2016: Today Nationwide has announced Quarter One results that show continued growth in our mortgages, savings and current accounts, underlining our commitment to the needs of UK homeowners and savers.

Joe Garner, Nationwide Chief Executive said: “As the world’s largest building society, we are in the fortunate position to be able to take a long term view and focus on providing great service, security and
stability for our members. This will be particularly important in a time of increased uncertainty and market volatility following the EU referendum.

“The contribution that our Society continues to make in support of the housing market and by offering ~long term value to savers, even in the current low interest rate environment, is evident in our trading results for the first quarter which represent a strong start to the year.

“Following the decision by the Bank of England to cut the Bank Rate to 0.25%, the Society will pass on the decrease in full to existing Base Mortgage Rate (BMR), Standard Mortgage Rate (SMR) and tracker mortgage customers. In addition, we will protect members who save regularly and who are building up a deposit to buy their first home; as a result, the Flexclusive Regular Saver at 5%, the FlexOne Regular Saver at 3.5% and the Help to Buy ISA at 2% are being maintained at their current rates.

“We continue to deliver market leading customer service amongst our high street peer group with a lead of 4.8%1, reflecting the primary focus on members which is the essence of the building society difference. A recent example of our continuing investment in service is the launch of our new Banking app with improved navigation and a range of new features.

“Looking forward, we remain focused entirely on the needs of our members, particularly during times of uncertainty. It is for this reason that we announced at our AGM last month our five-point plan for how we will support our borrowers and savers post Brexit and help them realise their ambitions. This includes a number of commitments to help people onto the housing ladder, or to move up through the housing market, while supporting those who want to save and plan for the future.”

Trading performance

Gross mortgage lending/market share

Gross mortgage lending for the quarter ending 30 June 2016 of £8.6 billion, up 26% on the comparative period and representing a market share of 15.0%

Net mortgage lending/market share

Net lending of £3.5 billion increased 67% and represented a market share of 52.8%

Member deposits balance movement/market share

Member deposits increased by £2.6 billion and represented a market share of 11.1%

Current account performance

During the period we opened over 139,000 new current accounts, 21% more than the same period last year

Financial performance

Underlying profit

Underlying profit before tax for the quarter was down 6% at £368 million

Statuary profit

Statutory profit before tax was up 6% at £401 million

Net Interest margin

Net interest margin in the quarter of 1.35% was lower than the full year to 4 April 2016 of 1.52%

Underlying cost income ratio

The underlying cost income ratio has increased from 51.6% to 53.6%

Capital position

Our capital position has remained strong, with consolidated CET1 and leverage ratios as at 30 June 2016 of 23.4% and 4.1% respectively (4 April 2016: 23.2% and 4.2% respectively)

You can find out more information in the Interim Management Statement for 2016/17.

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