British lender Nationwide pins profit fall on Brexit chill​

Nationwide posted a profit of £886 million for the nine months, which ended on December 31, down from £946 million a year earlier. (Reuters)
Updated 09 February 2018
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British lender Nationwide pins profit fall on Brexit chill​

LONDON: Nationwide Building Society , one of Britain’s three biggest providers of mortgages, said on Friday its profit fell 6 percent as consumer spending and confidence fell following the country’s vote to leave the EU.
The results represent one of the strongest indications yet from a major lender that the Brexit vote is having a significant impact on the British economy and consumer behavior.
Nationwide posted a profit of £886 million for the nine months, which ended on December 31, down from £946 million a year earlier.
While the economy remained resilient immediately after the country’s June 2016 EU vote, there were signs of a slowdown in 2017, it said.
“Household spending, a key driver of growth, lost some momentum. Retail sales and car registrations have slowed and consumer confidence has also softened,” Chief Executive Joe Garner said.
Subdued economic activity and a squeeze on household budgets will continue to pressure house prices and profits, Nationwide said.
British house prices recorded modest growth last month, with expensive properties in London particularly struggling to sell, an industry survey showed on Thursday.
Nationwide said research with partners including debt advice charity Citizens Advice and retailer Marks & Spencer into consumer behavior showed pressures on household budgets.
“We are seeing a lot of affordability pressure, not just unsecured lending but inflationary pressures coming through in a lot of ways ... including pressure on rents,” Garner said.
Garner said that with around one in three people in Britain having little or no material savings, inflation is squeezing budgets and impacting consumer confidence.
Nationwide said its net interest margin, the gap between what it pays savers and what it charges borrowers, was steady at 1.33 percent but would likely fall this financial year and next.
The lender said it had brought onto its staff around 300 contractors who had worked in its offices for infrastructure firm Carillion, which collapsed last month in Britain’s biggest corporate failure in a decade.
Nationwide reported its underlying profit, which measures management’s view of its underlying performance, rose to £883 million from £866 million a year ago.
Nationwide’s cost to income ratio rose to 59.6 percent from 57.6 percent on higher defined benefit pension costs.


Saudi banks see no significant impact from lira depreciation

Updated 18 min 55 sec ago
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Saudi banks see no significant impact from lira depreciation

  • National Commercial Bank, Saudi Arabia’s largest bank by assets, earlier on Thursday said there was limited impact from the decline of the lira on the bank

DUBAI: There has been no significant impact from the depreciation of the Turkish lira on the results and quality of Saudi Arabian bank assets, Talaat Hafez, spokesman for Saudi banks, was quoted as saying in a tweet carried by the kingdom’s state TV Alekhbariya on Thursday.
Earlier on Thursday National Commercial Bank, Saudi Arabia’s largest bank by assets, said there was limited impact from the decline of the lira on the bank.
The currency has lost nearly 40 percent against the dollar this year, driven by worries over Turkish President Tayyip Erdogan’s growing influence on the economy and his repeated calls for lower interest rates despite high inflation.