Nationwide has attacked the Chancellor’s decision to change how lenders are taxed, warning it will have a “disproportionate effect on building societies”.
In the summer Budget, George Osborne revealed the bank levy would gradually be reduced from 0.21 per cent to 0.1 per cent in 2021. However, an 8 per cent bank surcharge on profits will be introduced from 1 January next year.
In an interim management statement covering the three months to the end of June, Nationwide says it will be hit by a further £300m in taxes over the next five years – the equivalent to the capital required to support about £10bn of lending.
Chief executive Graeme Beale says: “The proposed changes to the bank levy and introduction of the tax surcharge on banking companies announced in last month’s budget may benefit UK headquartered international banks but will have a disproportionate effect on building societies such as Nationwide.
“This represents a missed opportunity to support diversity by acknowledging that building societies are different to banks and to recognise the contribution Nationwide and other mutuals make by lending to the UK economy and the housing market in particular.”
The statement shows the society lent £6.8bn to mortgage borrowers in the three months ending 30 June, a 17.2 per cent increase on the £5.8bn lent in the same period of 2014.
This meant its market share increased from 11.4 per cent at the end of June 2014 to 13.1 per cent a year later.
Net lending increased from £1.7bn to £2.1bn over the period, while the average LTV of new lending fell slightly from 70 per cent to 69 per cent.
The mutual reported a £379m pre-tax profit in the three months ending 30 June, up 49.8 per cent on the £253m reported a year earlier.