Nationwide gets home loans boost
Gross mortgage lending rose by 34 per cent to £21.6bn, savings balances rose by £5.7bn and more than 316,000 new current accounts were opened, up 20 per cent on the same period a year earlier.
Chief executive Graham Beale said some of the earnings would be put towards beefing up its capital ratio.
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Hide AdThe retained profits will add to the £550m raised to boost its balance sheet last year after creating a new type of special share.
Nationwide has been ordered to bolster its finances by the Prudential Regulation Authority (PRA), as a buffer against future financial crises.
Mr Beale said: “This trading performance translates into a strong set of financial results with underlying profit up 105 per cent to £539m.
“Retained earnings, together with the successful issuance of capital in December 2013, have further strengthened our capital ratios and we are significantly ahead of the plans agreed with the PRA last year.”
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Hide AdThe chief executive said the results continued trends seen in previous half-year results, with the lender continuing to play a leading role in the housing market.
Nationwide’s market share of gross mortgage lending is 15 per cent and it said it continued to account for a fifth of all first-time buyer home loans.
The figures showed that it raced to take advantage of a flagship Bank of England scheme that rewards lenders by giving them access to cheap finance by drawing down £4bn in the month before it closed.
The Funding for Lending scheme (FLS) was launched in 2012 to stimulate borrowing by households and businesses by giving incentives to banks and building societies.
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Hide AdBut a marked improvement in the housing market meant that the home loan element was scrapped so that it could be re-focused on business, with the last funds available to be drawn down in January.
Nationwide revealed that it had drawn down £4bn in that month alone, nearly half of the total £8.5bn funding it had taken advantage of since the scheme launched in June 2012. It was double the £2bn drawn down in the three months to December.