Following the Bank of England’s decision to cut the base rate to a record-breaking 0.25pc last week, Nationwide said it will pass on this reduction eligible mortgage customers, while protecting regular savers from the reduction.
Advertisement
Nationwide added saving rates will remain unchanged at 5%, 3.5% and 2% for customers who now hold “Flexclusive regular saver”, “FlexOne regular saver” and “Help to Buy ISA” products respectively.
Mr Garner added that Nationwide will pass on the interest rate cut, from 0.5 per cent to 0.25 per cent, to borrowers “in full”.
Nationwide, the world’s largest building society, has defied the Bank of England and made a decision to not pass on an interest rate cut to savings accounts to protect savers from losing returns.
As a result, savers in Nationwide’s Flexclusive Regular Saver, Regular Saver, FlexOne Regular Saver, Help to Buy ISA, Save to Buy and Save to Buy ISA will see no change in their existing rate.
The society’s net interest margin in the quarter was 1.35% – down on its full-year margin 1.52% in the year to April 4.
The mutual, which reports its figures to 30 June as Q1, confirmed net residential lending of £3.5bn, a 67% increase on the previous year, with buy-to-let completions of £1.7bn and net lending of £0.9bn.
Statutory profit before tax was up 6% at £401m, including £31m of derivative and hedge accounting gains which are excluded from underlying profit.
On the impact of Brexit, Nationwide said: “Whilst it is too early to make clear impact assessments about the European Union referendum outcome, the uncertainty generated could adversely impact investment decisions and consumer spending with a consequent impact on broader growth in the near term”.
New current account openings have increased by 21 percent to over 139,000 as more people choose to manage their money every day with us.
Nationwide said: “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”.
“The contribution that our society continues to make in support of the housing market and by offering long term value to savers, even in the current low interest rate environment, is evident in our trading results for the first quarter which represent a strong start to the year”.
Advertisement
“Nevertheless our mutual model combined with our financial strength means we are able to focus on taking a long-term view for the benefit of members, rather than actions to drive short-term profitability”.
