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.


EU could compensate firms hit by US sanctions over Iran — French minister

Updated 20 May 2018
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EU could compensate firms hit by US sanctions over Iran — French minister

  • In 1996, when the United States tried to penalize foreign companies trading with Cuba, the EU forced Washington to back down by threatening retaliatory sanctions

PARIS: France is looking to see if the European Union could compensate European companies that might be facing sanctions by the United States for doing business with Iran, said French finance minister Bruno Le Maire on Sunday.
Le Maire referred to EU rules going back to 1996 which he said could allow the EU to intervene in this manner to protect European companies against any US sanctions, adding that France wanted the EU to toughen its stance in this area.
In 1996, when the United States tried to penalize foreign companies trading with Cuba, the EU forced Washington to back down by threatening retaliatory sanctions.
European firms doing business in Iran face sanctions from the United States after President Donald Trump withdrew from a 2015 nuclear deal with Iran.
“Are we going to allow the United States to be the economic policeman of the world? The answer is no,” Le Maire told C News TV and Europe 1 radio on Sunday.
Le Maire added it was important Italy kept its EU budget commitments, in light of plans by Italy’s new coalition government to ramp up spending — which could put Rome at odds with the EU.