British lender Nationwide Building Society has reported a 50 per cent drop in its full-year profits and warned on its outlook as impairments rise and competition for retail funds increases.
Britain's largest building society reported an underlying pretax profit of £393 million in the year ended April 4th, compared to £781 million in the same period last year.
"We expect the significantly reduced level of underlying profit in the second half of 2008/09 to continue throughout 2009/10," said the building society.
Its reported pretax profit, which includes an exceptional charge of £241 million to cover its contributions to the depositor protection scheme, came in at £212 million compared to £686 million last year.
The customer-owned lender said the government levies account for more than half of the fall in its reported profit.
"The reduction of 50 per cent reflects the cost of carrying additional liquidity and margin compression in a low interest rate environment, together with an increase in impairment provisions in the current recessionary conditions," said the building society.
