Nationwide Building Society Profits Fall with Mortgage Drop of 72 percent
The Nationwide Building Society, the largest customer-owned lender in the United Kingdom, said that mortgage lending has fallen by nearly 72% during the first half of the year as they funded loans from deposits of customers in the middle of a meltdown of the housing market.
Net home loan volumes for residents decreased from £3.6 billion to £1 billion during the last 6 months ending September, according to a statement the company gave on Monday. The gross residential lending volumes also dropped. Nationwide has written down £416 million in investments related to credit, adding to the writedowns of April amounting to £418 million.
This decline underscores the terrible effects of crumbling house prices, of which have slowed down the buying market to nearly a standstill throughout parts of the United Kingdom. However, unlike many of the other high street companies, Nationwide is passing the benefits of the 1.5% interest rate cut from the Bank of England last week onto their customers.
Graham Beale, the Chief Executive Officer of the Nationwide Building Society, said that the wholesale market is still fragile, and they anticipate that the challenging environment of the economy in the United Kingdom is going to continue well into next year and maybe into 2010 as well. Prices have fallen for the 11th month in a row and are 12.4% lower now than last year, he continued. However, Nationwide is going to keep moderating their lending in order to ensure that they are covered with group deposits, he added.
Get more information about the Nationwide Building Society at: www.nationwide.co.uk
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