Nationwide Building Society has reported a sharp fall in profits as the banking sector continues to feel the effects of tough competition and the PPI scandal's last hurrah.
The mortgage lender said on Friday that statutory pre-tax profits for the half-year to September came in at £309m - a fall of 40% on the same period last year. That reflected, Nationwide said, a £52m charge for litigation and conduct including a previously disclosed £36m hit for the mis-selling of payment protection insurance.Nationwide's chief executive Joe Garner told members it had prioritised low mortgage and lending rates in a tough market
The industry rushed to set aside more cash after witnessing a flood of interest and compensation claims ahead of the PPI deadline of 29 August. Nationwide also, like rivals, blamed tough competition in a low interest rate environment for a reduction in net interest income and a surge in administrative expenses.The results showed investment in digital technology continuing to drag on profitability at a time when businesses and consumers are reluctant to spend given the uncertain political and economic environment.
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