By Lawrence White and Iain Withers
LONDON (Reuters) -Nationwide Building Society reported its annual profit nearly doubled on Friday, but warned rocketing inflation in Britain could dent the economy and lower house prices.
The customer-owned lender reported a pretax profit for the year ended April 4 of 1.6 billion pounds ($2.00 billion), up from 823 million pounds the previous year.
But CEO Joe Garner warned price rises were starting to hurt customers, with inflation hitting levels not seen since the 1980s in Britain due to soaring fuel prices and supply chain disruptions worldwide.
“The emergence of higher inflation, which has been exacerbated by the war in Ukraine, is likely to exert a significant drag on the economy in the near term,” Garner said.
It was Garner’s last set of results at the helm before handing over to former TSB Chief Executive Debbie Crosbie on June 2.
Britain’s second-biggest provider of home loans, Nationwide competes with the country’s big banks but unlike them is owned by its customers.
Nationwide’s finances were lifted by a strong economic recovery from pandemic lockdowns, including a 6.9 billion pound leap in gross mortgage lending as it benefitted from a buoyant housing market.
However, the lender cautioned the housing boom may not last.
“There is a risk of a downward movement in house prices, given the pressure on household budgets,” the lender said.
Bank of England Governor Andrew Bailey said on Monday that the current surge in inflation was the central bank’s biggest challenge since it gained independence in 1997, but denied that policymakers had been “asleep at the wheel”.
Nationwide said member benefit, a gauge of benefits it offers that better the market average, remained below its target at 325 million pounds due to low interest rates and strong price competition in mortgages.
Its listed bank rivals such as Lloyds and NatWest last month reported rising profits but warned of a possible hit to growth from Britain’s looming cost of living crisis as fuel and food costs soar.
($1 = 0.8013 pounds)
(Reporting by Lawrence White and Iain Withers; editing by Jason Neely)
