Nationwide claims 9.5% mortgage market share
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Nationwide Building Society has reported a pre-tax profit of £317m for the year ending April 4 2010, down on £341m in the previous year.
However the society increased gross lending to £12.8bn, up from £12.0bn in 2010, representing a 9.5% market share, up from 8.7% in 2010.
The society says it has seen significant capital repayments as its members have sought to pay down their debts and take advantage of the prevailing low interest rate environment, so that over the full year it has experienced a reduction in its total mortgage balances.
Residential mortgage accounts more than three months in arrears stand at 0.68%, the same percentage as in 2010.
The society has a Base Mortgage Rate pledge, which means a number of its mortgage holders are capped at 2% above Bank of England base rate.
Nationwide says its borrowers have little incentive to switch to alternative mortgage products, which has meant that its BMR balances have increased.
It estimates the customer benefit of maintaining its BMR pledge has been in the region of £600m over the past financial year.
In addition, it has also continued to waive the contractual floor of 2.75% on tracker mortgages, instead applying the floor at 2%, representing a saving to members of over £50m in mortgage interest over the year.
Following an assessment of all impaired cases on its commercial books it has made a total commercial impairment charge of £175m in the year, 41% lower than the charge in the previous year of £299m.
Overall the charge for impairment losses on loans and advances is down 35% on last year at £359m.
Specialist residential mortgages are made up of £17.5bn of advances made through its specialist lending brands, The Mortgage Works and UCB, and £2.8bn through its regional building society brands Derbyshire, Cheshire and Dunfermline.
Buy-to-let mortgages make up 72% of total specialist lending, 20% relates to self-certification mortgages, 6% relates to near prime, and just 2%, amounting to approximately £0.4bn, relates to sub -prime which was primarily acquired as part of the mergers with Derbyshire and Cheshire.
Graham Beale, chief executive of Nationwide, says: “Our balance sheet has continued to strengthen. Our Core Tier 1 ratio is 12.5%, up from 12.2% and total solvency ratio has increased to 19.5%. Strong liquidity, asset quality and a diversified funding base all provide a stable platform for our business.
“We remain committed to helping first- time buyers and existing homeowners. Our gross residential lending was £12.8bn, representing a 9.5% market share. 23% of new borrowers during the year were first-time buyers.”
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