Nationwide H1 profits slip to £696m as commercial real estate arm axed

Nationwide-building-2013-700x450.jpg

Nationwide’s half-year profits before tax fell 13 per cent to £696m and the firm will close its Commercial Real Estate arm due to Brexit fallout.

At the end of September last year the firm’s profits were £802m.

Nationwide says the profit drop is due to record low interest rates, stiff competition in the mortgage market and “the conscious decisions we have taken over recent years to support our members”.

The firm’s 2016 H1 profits include a £100m boost from selling its stake in Visa Europe.

Nationwide finance director Mark Rennison says: “Nationwide has traded strongly over the first six months of the year, increasing gross mortgage lending by 17 per cent to £17.5bn, a market share of 14.5 per cent.”

Nationwide says its Commercial Real Estate arm makes up £2.7bn of its assets, around 1 per cent, and that it has been running the business down.

The lender says it now has a more negative outlook for the property sector.

A statement from the lender says it has seen a “modest slowdown in activity since the EU referendum.”

It adds that the firm believes “less certain economic outlook may soften demand but prices will continue to be supported by low interest rates and limited supply of new homes”.