Nationwide Pledge to Savers As Profits Rise

Nationwide (LSE: NBS.L - news) has said it will pass on the Bank of England's 0.25% interest rate cut to tracker and some other mortgage customers and protect the rates on some savings accounts.

The building society saw quarterly pre-tax profits to 30 June rise 6% to £401m, and has reported an underlying profit of £368m for the quarter.

Gross mortgage lending rose 26% compared to the same quarter last year, to £8.6bn, which equates to a 15% market share.

"We will protect members who save regularly and who are building up a deposit to buy their first home," CEO Joe Garner said.

Nationwide has pledged that no savings customers on variable rates will see a reduction of more than 0.25%.

As a result, savers in Nationwide's Flexclusive Regular Saver, Regular Saver, FlexOne Regular Saver, Help to Buy ISA, Save (LSE: 0O98.L - news) to Buy and Save to Buy ISA will see no change in their existing rate.

Britain's biggest building society said it is still too early to determine any clear impact from the EU referendum, but stated the uncertainty generated could have an adverse effect on investment decisions and consumer spending in the near term.

Finance director Mark Rennison said: "Our range of long term loyalty products has led to an increase in member deposits in the first quarter to £2.6bn.

"Our recommend a friend proposition which values members for their loyalty and advocacy has helped Nationwide continue to be a net gainer of the current account switching service."

More than 139,000 new current accounts were opened during the quarter, 21% more than same period last year.

The lender stated: "The sustained low interest rate environment and competition in core markets will maintain pressure on margins and we anticipate profits are likely to moderate in the period ahead."