Nationwide profit slumps 64%

Nationwide Building Society says the financial services market will remain “difficult” next year as it reports a 64% drop in profit.

The firm says pre-tax profit slumped to £117m in the six months to 30 September, from £322m a year earlier, hit by writedowns in the value of its commercial property portfolio and less returns from lending as a result of low interest rates.

The mutually-owned institution took over the Dunfermline Building Society earlier this year and the Derbyshire and Cheshire Building Societies last year.

It has been positioning itself as a safe, sensible and secure option in recent marketing campaigns in the wake of the financial crisis that hit the banking sector last year.

Graham Beale, chief executive of Nationwide says it expects the remainder of this year and next to present “a very difficult trading environment”, adding rising unemployment “will inevitably exert downward pressure on house prices” in 2010.

The mutual appointed former HSBC marketing director, James Boulton into the same role earlier this year.