Britain’s Nationwide almost doubles profit as costs fall

Nationwide Building Society (POB_p.L) nearly doubled annual profit after improving interest income and margins as it shaved costs, it said on Friday.

The bellwether mortgage lender reported pretax profit for the year to April 4 of 823 million pounds ($1.17 billion), compared with 466 million pounds the previous year.

But Nationwide added that its member financial benefit, which is the value it delivers to its member-customers through beneficial rates and other measures, was less than its 400 million pound target.

“Although the success of the UK’s vaccination programme gives grounds for optimism, there is continued uncertainty around how quickly life and the economy can return to normal,” said Chief Executive Joe Garner.

Nationwide said it cut nearly 100 million pounds in administrative costs while also reducing staff and contractor numbers.

The lender has gone further than most British companies in locking in remote working adopted during the COVID-19 pandemic, telling all its 13,000 office-based staff in March to work from anywhere in the country. read more

Nationwide is also taking advantage of the changes to close some offices to cut costs, including three in its home town of Swindon in southwest England. It also cut about 100 jobs last summer.

The company aims to return member benefits to the 400 million pound target over the medium term, though it said last year that it would no longer offer customers savings returns significantly above market rates as the sector sought to contend with the impact of the pandemic.

($1 = 0.7045 pounds)

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Source: https://www.reuters.com/business/finance/britains-nationwide-profit-almost-doubles-2021-05-21/