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Nationwide looks to shut branches as profits slide

Nationwide has reported pre-tax profits of £212m, down 46 per cent on the £393m reported last year.

The UK’s largest building society blames the drop on difficult trading conditions, a low interest rate environment and margin compression.

Nationwide now has an 8.7 per cent market share of gross lending in the UK and lent £12bn in residential mortgages in the year ending April 4 2010.

Nationwide says it cannot rule out closing some of its branches and reviewing its distribution arrangements in order to reach its cost targets. The building society last week announced that it is to merge its six processing centres into two but said it is too early to say how many jobs would be lost.

It has pledged to continue to honour its base mortgage rate pledge, which states that the majority of customers have access to a rate which is capped at two per cent above Bank of England base rate.

The building society says its residential mortgage arrears percentage, for those in arrears of three months or more, was 0.68 per cent, compared with 0.64 per cent in 2009.

Chief executive Graham Beale (pictured) says: “This is a strong set of results for Nationwide, and that is particularly pleasing given the difficult trading environment that we have experienced over the past year. We have provided a safe haven for our members’ savings and supported our borrowers, and have remained very competitive in these core markets.

“I am encouraged to see that the new Government intends to bring forward proposals to foster diversity, promote mutuals and create a more competitive banking industry. This is against a backdrop of public and political pressure on regulators to be seen to act decisively to prevent a repeat of the recent financial crisis. We support the objective of a more secure and stable framework for banking regulation.

“However, it is vital that this framework is developed with the interests of the mutual sector in mind. It must not undermine the competitive position of the sector, and must avoid the unintended consequences that may arise from a ‘one size fits all’ approach to regulation. It is essential that we work together to protect building societies, and their members, for the future.”

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Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. graham Shurety 26th May 2010 at 12:10 pm

    The one area they conveniently forgot to mention was also a loss of customer loyalty, which I am certain has hit them hard. My daughter and me both had independant dealings with Nationwide during the past 24 months and were left aghast at the sheer contempt we were individually shown at the respective branches we dealt with!

  2. Having been a member of Nationwide for more than 20 years, I agree with Graham’s comment in that I have lost more and more confidence in them over the last couple of years. They used to stand head and shoulders above the banks and othe BS’s for customer service and low cost products but they have gradually been upping their charges and their general CS has seen a big dive. I used to rave about Nationwide and recommend them to friend’s and family, but no more….and I am considering taking my money elsewhere.

  3. I always used to refer my clients to Nationwide for their deposit savings on the basis that their rates, whilst never the best, were always consistent and fair.

    The last couple of years have seen them start playing all the nasty tricks of the banks.

    It’s nice to see that this approach has had the opposite affect to that intended.

    I don’t see them running ad’s saying how different they are anymore.

  4. I too used to be a LOYAL customer for more than 25 years, until I needed to renew my mortgage with them at the end of its fixed term rate. They would not give me a new mortgage and left me high and dry – I secured a new mortgage with Halifax – NW’s customer service was shocking and I am extemely dissappointed at the lack of support they gave me. I am no longer a NW customer – moving all my accounts with them to another bank – NW’s loss!! If this is how they treat all their loyal customers, then I’m not surprised at the losses they’ve incurred – Will this be the start of their demise?

  5. Have held savings with Nationwide for 30 years, the honesty of their deal for customers was the main appeal. For example their cash card that enabled customers to get currency from cash points abroad without paying the excessive changes. That was withdrawn. Half decent rate for savings accounts, scrapped in favour of an attitude that seemed to take long term customer business for granted. Yes, those same mean tricks used by the banks. Years of brand equity and trust has been steadily destroyed by a management team hell bent of becoming like every other bank so, guess what, your customers are taking out their savings and going to every other bank that offers them a better deal.

  6. I am surprised that anyone is surprised!

  7. Maybe…..and i know this is not going to be popular….just maybe if they didn’t piss all their money away on sponsoring the England football team then maybe they wouldn’t have to piss off loyal customers by closing branches.

    Aren’t they supposed to be a building society whose members actually own it?

    I give up, if they want to be as unhelpful and callous as some of the high street banks then goodbye and good riddance.

  8. Yes not a surprise the guys from little Britain are doing the adverts now, I suppose they are daring to be different, they are totally not giving a damn about their customers(owners!!!). it’s all about spin and I wish the management team would “spin” and I would be happy to show them what digit to “spin” on!

  9. I couldn’t agree more with the comments above. We used to reccomend clients to Nationwide (other way round) using exactly the saem wording as Mr Smug and only ever ONCE mortgaged a client away from them who we had placed there and that was becuase he would no longer fit their then tight lending criteria.
    We regularly advise moving deposits away from Nwide now and haven’t reccomended them for a mortgage for over 2 years and that’s despite the fact we used to advise client to use Nwide when they didn’t pay us any commission!
    Their old advserts with the fat bloke are actually what I think Nwide is like now and I suspect that is what many consumers think they are like too!

  10. Stupid little britain adverts that cost a fortune, wasting money on football sponsorship. Let the brand sell itself your different, people with any brains know that that is why I bank with you!!!

  11. NATIONWIDE ARE THEIFS.

    We applied for a mortgage, were refused however they cashed our cheques (even the ones they were not entitled to cash) and we have been fighting them to get our money back.

    They have been telling us lie after lie after lie and have effectively STOLEN OUR MONEY!

    DO NOT EVER USE THIS BUNCH OF CRMINALS!!!!!

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