The Nationwide Building Society said today that its annual profit had nearly doubled, but warned that soaring inflation in Britain could hurt the economy and drive down house prices.
The customer-owned lender reported pre-tax profit for the year to April 4 of £1.6bn, up from £823m the previous year.
But chief executive Joe Garner has warned price rises are starting to hurt customers, with inflation reaching levels not seen since the 1980s in Britain due to soaring fuel prices and chain disruptions supply in the world.
“The emergence of higher inflation, which has been exacerbated by the war in Ukraine, is likely to exert a significant downturn on the economy in the near term,” Garner said.
It was Garner’s last set of results at the helm before handing over to former TSB chief executive Debbie Crosbie on June 2.
Britain’s second largest home loan provider, Nationwide competes with the country’s big banks, but unlike them, it belongs to its customers.
Nationwide’s finances were boosted by a strong economic recovery from the pandemic lockdowns, including a £6.9bn jump in gross mortgages, as it benefited from a buoyant property market.
However, the lender has warned that the property boom may not last.
“There is a risk of a downward movement in house prices, given the pressure on household budgets,” the lender said.
Bank of England Governor Andrew Bailey said on Monday the current inflation spike was the central bank’s biggest challenge since independence in 1997, but denied that policymakers had “fallen asleep at flying”.
Nationwide said the membership benefit, a gauge of the benefits it offers that improves on the market average, remained below its target of £325m due to low interest rates and stiff competition on mortgage prices.
Listed banking rivals, such as Lloyds and NatWest, last month reported higher profits but warned of a possible hit to growth from Britain’s looming cost-of-living crisis. , as fuel and food prices soar.