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Nationwide profits from mortgage boom

The Nationwide has reported a 21 percent jump in profits on the back of a booming mortgage business. Its pre-tax profits for the 2003-04 financial year hit £426.8 million, a sharp jump from £353.3 million last year.

The building society’s net mortgage advances rocketed 81 percent to over £13 billion, rising to a 13 percent share of the mortgage market. These results represent a remarkable turnaround for the nationwide, which commanded a mere 3.1 percent market share in 2001-02.

Nationwide’s rebound came despite a decision to scrap the attractive temporary introductory mortgage rates that had previously been offered to new customers. CEO Philip Williamson described the results as “outstanding”, and said that they showed that organisations could offer fair prices to all its customers and still enjoy success.

BLAST FOR DOOM-MONGERS

Williamson took a shot at doom-mongers who have been predicting that the housing market it ripe for a crash, insisting that prices are sustainable: “We believe that some of the language that has been used by a number of commentators has been slightly emotive and inappropriate,” he rapped.

“Words such as ‘crash’ and ‘slump’ are totally inaccurate. There will be a progressive slowdown over the remainder of this year.”

However, he also warned that results will be brought down to earth as higher interest rates take the heat off the housing market, warning: “Our net mortgage lending will more closely reflect our market share at around 10 percent.”