Nationwide Half-Year Profit Slumps on Commercial Property Losses
Nationwide Building Society, the U.K.’s largest customer-owned lender, said half-year pretax profit fell 48 percent, hurt by losses on commercial property loans and claims linked to the mis-selling of loan insurance.
Pretax profit declined to 124 million pounds ($199 million) in the six months to September 30 from 238 million pounds in the year-earlier period, the lender said in a statement today. Profit was reduced by a 193 million-pound impairment on commercial property and a 45 million-pound charge for compensating clients sold payment-protection insurance they didn’t need.
“Our results for the period have been affected by losses on lending to the commercial property sector,” the Swindon, England-based company said in the statement. “This lending was almost exclusively undertaken in the period up to 2008, when the credit crisis and subsequent recession led to severe falls in commercial property valuations.”
Mortgage lending in the period climbed to the highest in four years, with gross lending climbing 15 percent to 10.2 billion pounds, the company said. First-time buyers borrowed about 2.5 billion pounds, more than twice the amount in the year-earlier period, the company said.
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