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| Version 0 | Version 1 |
|---|---|
| Protection scheme hits Nationwide | Protection scheme hits Nationwide |
| (about 2 hours later) | |
| Nationwide, the UK's biggest building society, said profits had been hit by its "unfair" level of contribution to a savings protection scheme. | Nationwide, the UK's biggest building society, said profits had been hit by its "unfair" level of contribution to a savings protection scheme. |
| Pre-tax profits fell by 69% to £212m for the year to 4 April. | Pre-tax profits fell by 69% to £212m for the year to 4 April. |
| It said the £241m it had to pay into the Financial Services Compensation Scheme - which guarantees savings up to the value of £50,000 - was "illogical". | It said the £241m it had to pay into the Financial Services Compensation Scheme - which guarantees savings up to the value of £50,000 - was "illogical". |
| Meanwhile, low interest rates led to poorer returns from mortgage customers, while it was also squeezed by bad debt. | Meanwhile, low interest rates led to poorer returns from mortgage customers, while it was also squeezed by bad debt. |
| Provisions for bad debts - including missed mortgage repayments - rose sharply to £394m, it said. | |
| But the Nationwide said it remained strong "in the midst of turbulence". | But the Nationwide said it remained strong "in the midst of turbulence". |
| 'Disproportionate' | 'Disproportionate' |
| Chief executive Graham Beale added that Nationwide was the only major UK banking institution not to have to raise capital or seek access to government bailout schemes. | Chief executive Graham Beale added that Nationwide was the only major UK banking institution not to have to raise capital or seek access to government bailout schemes. |
| "This reflects a combination of our naturally high capital and prudent lending practices which are the hallmark features of a strong building society," Mr Beale said. | "This reflects a combination of our naturally high capital and prudent lending practices which are the hallmark features of a strong building society," Mr Beale said. |
| The firm added that only 0.6% of its home mortgage customers were more than three months in arrears - compared with the Council of Mortgage Lenders industry average of 2.39% as at 31 March. | The firm added that only 0.6% of its home mortgage customers were more than three months in arrears - compared with the Council of Mortgage Lenders industry average of 2.39% as at 31 March. |
| Nationwide profits were also hit by costs linked to it integrating the Portman, Cheshire and Derbyshire building societies. | Nationwide profits were also hit by costs linked to it integrating the Portman, Cheshire and Derbyshire building societies. |
| But the building society complained about the way that its FSCS contributions were calculated. | But the building society complained about the way that its FSCS contributions were calculated. |
| "We regard the fact that the FSCS charge is not linked to the level of risk posed to the financial system by individual institutions, but instead is allocated by share of the retail savings market, as illogical and unfair, producing a disproportionate outcome for the low risk retail funded institutions, particularly building societies," Mr Beale said. | "We regard the fact that the FSCS charge is not linked to the level of risk posed to the financial system by individual institutions, but instead is allocated by share of the retail savings market, as illogical and unfair, producing a disproportionate outcome for the low risk retail funded institutions, particularly building societies," Mr Beale said. |