Profits nationwide rise 39% as interest rates rise

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Full-year profits of Nationwide, the UK’s largest construction firm, rose 39% as rising interest rates boosted the lender’s profits, but its chief executive put on the lookout for the impact of higher borrowing costs on customers.

“The shift to higher interest payments is a challenge for households as they adjust their spending priorities,” Chief Executive Debbie Crosbie said on Friday. “We will continue to support those borrowers who experience payment difficulties.”

The British lender reported £2.2 billion in pre-tax profit for the year to April 4, up 39% year on year. Revenue for the year was £4.7 billion, up 20%.

Like other lenders, Nationwide benefited from rising interest rates. Last week the Bank of England raised its base rate to 4.5%, the highest level since 2008.

The building society also said it would hand out a “fairer installment payment” after the results, giving eligible members £100 each for a total value of £340m.

Bad debt provisions for the year were £126 million, compared with a provision clearance of £27 million the previous year.

Nationwide said this stems from “a deteriorating economic outlook during the year”, with low arrears rates expected to rise.