Thursday, May 22, 2008
Efin typical!
Daily Mail: Nationwide accused of cashing in on credit crunch as profits soar by £112million
BRITAIN'S biggest building society has cashed in on the credit crunch by pushing up profit margins on some mortgages and savings to make an extra £112.1million.
Nationwide said yesterday that profits surged by 17per cent last year to £781.1 million.
Posted by rental john @ 04:24 PM (352 views) Add Comment
6 Comments
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1. Dazednconfused said...
Accuse a mutual society of profiteering... The Mail is terrible.
2. Fed Up said...
I have made a comment on the Savings forum that Nationwide is cutting its Flex Account rate from 3.5% to 2% for millions of customers. If this affects you then move your current account and savings and teach them a lesson!
3. plato said...
Well, at least they are a mutual, so depositors should benefit out of this, which is how it should be. Now if house prices come down to realistic levels that will put the icing on the cake and give people a chance to buy.
Can't say they are squeaky clean though.
4. icarus said...
Not sure what 'mutual' means any more. The increase in deposits hasn't led to an increase in their mortgage lending and they charge Libor+, just like any bank that funded by the money markets. Is there anything to stop them speculating in oil futures?
5. buctootim said...
As building societies don't have any shareholders and don't pay dividends to members - what do they actually DO with their profits?
6. Tipping Point said...
With the chances of a crash being as high as they are it's a safe bet to assume these profits will go straight into increasing the size of their reserve. In theory the profit could be distributed in the form of increased savings rates or lower mortgages, but in the current climate the management team know that this would be seen as wreckless, so into the reserve it goes. As for where reserve money is kept, my guess is the Bank of England. Does anyone know the correct answer?