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TheCountOfNowhere

Nationwide Profits Soar

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http://news.sky.com/story/1168967/nationwide-sees-half-year-profit-up-155-percent

"The Nationwide has reported a 155% leap in half-year underlying profits, citing more lending and a rush of new customers coming to it from high street rivals."

Im glad I have removed my money their organisation.

If they are not careful they willl be the new NR.

"The lender's performance has been boosted an improvement in its net interest margin - the difference between the rate it offers to savers and the rate it charges borrowers"

no-shit-sherlock.jpg

Edited by TheCountOfNowhere

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I can't tell from that release what is driving profit. Could just be less provisions tthrough to bottom line or maybe improving net interest margin as savers rates reduced.

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I fail to see how a supposedly mutual organisation can have profits.

Call me old fashioned, but surely any "profits" should be returned to the savers in the form of decent interest rates.

They are my bank, but I hate them with a passion. What a pointless organisation!

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I fail to see how a supposedly mutual organisation can have profits.

Call me old fashioned, but surely any "profits" should be returned to the savers in the form of decent interest rates.

They are my bank, but I hate them with a passion. What a pointless organisation!

Absolutely. I moved the ISA I held with them to Triodos recently. I took a short term interest rate hit there, but I didn't want to support them with my savings any more.

The problem is that all the savings accounts look terrible these days and supposedly more ethical choices like Co-op and Nationwide look as dodgy as the big banks.

Imagine if NS&I reopened index linkers in this environment. There would be a stampede, and I'd be joining it.

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So there you have it, the timebomb perfectly described.

Profits made on paying savers less, and keeping the borrowers on their rates.

Good for borrowers, bad for capital formation....thats, LESS real money in the economy and decreasing.

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IMO the nationwide don't treat their customers very well....they have accounts with so many hoops and hurdles to overcome, different places where you can open accounts, different accounts for different places, two tier on-line...it seems they try to make things as complicated as possible....nothing is straight forward and simple, they have tried to improve on this in recent years but not nearly enough IMO.

Some of their mortgage holders pay some of the lowest rates there are (because of the contract they signed, lucky for them) that has to be upheld, and their saving accounts have some of the lowest rates there are, so it makes you wonder if the savers are paying for the good base rate linked loans?.......I do not see them, a mutual building society paying back any of their profits to their owners, their customers....so who are the other gainers from all this? ;)

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From the Graundian:

Nationwide said its share of new mortgage lending rose to 15.4% from 14.4% a year earlier, while net lending – loans, less repayments – leapt 75% to £5.6bn, giving it an 81.8% share.

Crikey. The only ones growing their mortgage book over the year?

Nationwide said it accounted for more than one in five of all first-time buyer mortgages in the UK, but said it would not be signing up to the government's latest phase of the Help to Buy scheme.

The mortgage guarantee scheme allows buyers to borrow up to 95% of the property price - an area Nationwide insists it has already been active in since November 2011.

"We're already there and offering these loans," said Beale.

At least they've rejected HTB2 at this stage. Points for that.

EDIT: typo

Edited by Quicken

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So there you have it, the timebomb perfectly described.

Profits made on paying savers less, and keeping the borrowers on their rates.

Good for borrowers, bad for capital formation....thats, LESS real money in the economy and decreasing.

Building a house is 'capital formation'

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I guess they learnt their lesson. Building societies were at least somewhat responsible during the last bubble. No massive failures as with banks...a few small BSs failed, but were able to be merged with larger ones with no taxpayer exposure...then they had to pay more to bailout banks via FSCS contributions...thanks Brown.

May as well do what nationwide are doing and be irresponsible. Its quite clear the government rewards bad behaviour.

Yes it will eventually end in failure, but they know now the taxpayer will be forced to bail them out, so why not? It pays to be too big to fail.

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Am I'm right in thinking that NW are in receipt of FLS? When I moved my savings to them about a year ago I was getting 2%. It then dropped to 1.7% early 2013 and then to 1.2% around June. Absolute crap.

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Would be interested to know how much of the net lending is via their BTL subsidiary "The Mortgage Works".

4/5 of UK net lending from one firm, incredible stuff.

The screw turns, month after month.

When several big banks (Sant...) having big negative net lending then it is relatively easy to get 80% of positive net lending...

Nationwide outstanding lending:

Total 164.3bn (+5bn in 6 months)

Nationwide (Prime residential mortgage): 115.7bn (70.4%)

TMW (BTL / Self cert mortgages) 25.6bn (15.6%)

Commercial (lots of housing associations) 19.1bn (11.6%)

Consumer lending (inc overdrafts) 3.9bn (2.5%)

Edited by koala_bear

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Am I'm right in thinking that NW are in receipt of FLS? When I moved my savings to them about a year ago I was getting 2%. It then dropped to 1.7% early 2013 and then to 1.2% around June. Absolute crap.

Yes very big users along with Barclays

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When several big banks (Sant...) having big negative net lending then it is relatively easy to get 80% of positive net lending...

Nationwide outstanding lending:

Total 164.3bn

Nationwide (Prime residential mortgage): 115.7bn (70.4%)

TMW (BTL / Self cert mortgages) 25.6bn (15.6%)

Commercial (lots of housing associations) 19.1bn (11.6%)

Consumer lending (inc overdrafts) 3.9bn (2.5%)

Indeed, just lays the strategies of the institutions bare. Nationwide pumping new money in, the rest looking for remortgaging on the best terms only (low LTV) and/or happy to encourage others to remortgage elsewhere.

Nationwide's 81%(£5.6Bn) implies total UK net lending of £7Bn in H1, a paltry sum indeed. HTB1 could account for a decent chunk of that, makes you wonder what scraps everyone else is fighting over.

HTB1 has 15,000 applications, could easily be a couple of billion of net lending from that alone. Might check later.

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Indeed, just lays the strategies of the institutions bare. Nationwide pumping new money in, the rest looking for remortgaging on the best terms only (low LTV) and/or happy to encourage others to remortgage elsewhere.

Nationwide's 81%(£5.6Bn) implies total UK net lending of £7Bn in H1, a paltry sum indeed. HTB1 could account for a decent chunk of that, makes you wonder what scraps everyone else is fighting over.

HTB1 has 15,000 applications, could easily be a couple of billion of net lending from that alone. Might check later.

That would suggest HTB1 amounts to £2-2.5bn if all application successful.

Still digesting the NW accounts

Latest nugget:

Geographical distribution of loans

Greater London 22%

Central England 22%

Northern England 20%

South East England (excluding London) 11%

South West England 9%

Scotland 9%

Wales and Northern Ireland 7 %

New business profile: Last 6m (preceeding 6m)

First time buyers 30% (27)

Home movers 28% (29)

Remortgagers 26% (23)

Buy to let 16% (21)

So new BTL lending down massively when HTB1 introduced

BTL also at cheaper end of properties (only 75% of average value value)

Edited by koala_bear

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Yes very big users along with Barclays

It's still only a small part of Nationwide's funding though – £2.5bn at 30 Sep (currently £4.5bn) vs £40bn of other wholesale funding and £136bn of retail funding.

What FLS has done is to lower market rates without lenders having to actually use the scheme to any great extent.

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~25% decrease in new BTL lending vs the previous 6 months

That table isn't saying that the BTL loan volume has dropped – just that BTL lending has dropped as a proportionate share of total new lending.

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1) If you were boss at Nationwide and saw how bosses at such as NR had got away with stupid lending and kept all their bonuses, wouldn't you be tempted to go for it?

2) Building Societies had to pay lots of money for bailouts. Low saving rates and high mortgage rates mean a free arbitrage to recoup those costs. Now the BS have stopped going bust it just becomes profits.

2009:

Building society chiefs say the massive cost of bailing out collapsed banks will force some of them into the red this year.

They are demanding an overhaul of the Financial Services Compensation Scheme in an attempt to avoid more building society mergers.

The building society bosses are furious that their members are being forced to pay for what they describe as the reckless behaviour of some banks.

Nationwide is just one of the building societies making a stand against the big High Street banks

The country's 55 societies will make total provisions of £300million, covering the first 18 months of payments to the FSCS.

Yorkshire Building Society estimates it will pay £20million to the FSCS over the next 18 months, while Coventry says its bill will be about £12million and Chelsea estimates

about £10million.

The biggest building society, Nationwide, will not disclose figures, but having recently taken over rivals Derbyshire and Cheshire, it now has about 13 per cent of retail deposits, suggesting a levy close to £150million.

Like other societies, Nationwide said it had been 'managing the business accordingly' since it first knew about the potential costs.

In practice this means giving savers and borrowers a less generous deal to allow it to make the extra provisions.

http://www.thisismoney.co.uk/money/article-1133044/Building-societies-rebel-banks-bailout-forces-red.html

Net result all the bailouts (and fines for PPI etc) are all being paid by savers via the low rates.

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Nationwide have some great front line staff - taking time to help the elderly with their savings etc

but the central administration are among the worst

Its kind of appropriate that the head office is built on a flood plain - lets hope that nice moat they have in front doesnt get too deep...

fl5.jpg

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Nationwide have some great front line staff - taking time to help the elderly with their savings etc

but the central administration are among the worst

Its kind of appropriate that the head office is built on a flood plain - lets hope that nice moat they have in front doesnt get too deep...

fl5.jpg

Swanky. Their campus even has tennis courts!

Edited by Executive Sadman

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All you need to remember about profits is how quickly they can turn into losses

For example

RBS 2006 - Profit £9.2 billion - http://news.bbc.co.uk/1/hi/business/6406879.stm

RBS 2007 - Profit £9.9 billion - http://news.bbc.co.uk/1/hi/business/7268276.stm

RBS 2008 - Loss £24.1 billion - http://news.bbc.co.uk/1/hi/business/7911722.stm

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Swanky. Their campus even has tennis courts!

It looks like they have a garden on the roof or is that some eco thing?

Edited by Ash4781

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I fail to see how a supposedly mutual organisation can have profits.

Call me old fashioned, but surely any "profits" should be returned to the savers in the form of decent interest rates.

They are my bank, but I hate them with a passion. What a pointless organisation!

I have 3 accounts with them:-

Current account earning 5% interest on £2500

Monthly saver earning 2.5% interest (max increase £1000 per month)

instant access 2% interest.

These are the best rates I have found anywhere; please let me know if there are better rates anywhere else and I will shift my cash.

PS. I already have £13k split between ZOPA & RateSetter and I am reluctant to put any more in to P2P.

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