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Nationwide's fiscal 2018 profit falls YOY despite lower provisions, impairments

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Nationwide's fiscal 2018 profit falls YOY despite lower provisions, impairments

Nationwide Building Society posted a year-over-year decline in preliminary profit after tax for the year ended April 4 to £745 million from £757 million.

Statutory pretax profit fell to £977 million from £1.05 billion.

Net interest income came in at £3.01 billion, up from the year-ago £2.96 billion. Fee and commission income increased to £449 million from £446 million a year earlier, while fee and commission expense increased to £244 million from £221 million a year ago.

Nationwide booked £84 million in other operating expenses, including a £116 million loss from a debt buyback during the year, compared to year-ago income of £100 million, which relates to a gain on the company's disposal of its stake in Visa Europe Ltd. Losses from derivatives and hedge accounting stood at £1 million, compared to gains of £66 million a year prior.

Impairment losses on loans and advances to customers fell to £107 million from the year-ago £131 million. Provisions for liabilities and charges also dropped to £25 million from the year-ago £136 million

As of April 4, the firm's common equity Tier 1 ratio was 30.5%, up from 25.4% a year earlier. Nationwide's Capital Requirements Regulation leverage ratio on an end-point basis was 4.6% as of April 4, up from 4.2% a year earlier.

CEO Joe Garner said the company expects modest growth in its core product markets. Mortgage lending will likely rise at a "fairly pedestrian pace" and the mortgage market is expected to "remain extremely competitive," he added.