"Our profit performance has reduced in line with our expectations and reflects in part the continued margin pressure due to the prevailing low interest rate environment"
In its interim management statement, Nationwide also reported a 22% rise in net mortgage lending from £6.7bn in Q3 2015/16 to £8.2bn.
Buy-to-let lending decreased over the period due to underwriting and stamp duty changes, as well as higher maturities compared to the same period last year.
Gross buy-to-let lending fell from £4.6bn to £3.7bn while net lending dropped from £2.2bn to £0.9bn over the period.
Over the nine month period, underlying profit before tax fell by 23% to £866m, which the Society says was driven by a reduction in net interest income, growth in underlying costs and an increase in impairment charges. This was partially offset by a gain of £100m from the disposal of its investment in Visa Europe during the period.
Statutory profit before tax fell by 16% to £946m.
Nationwide Building Society Finance Director, Mark Rennison, said: “We have continued to trade strongly during the third quarter of the year, building on the success of the first six months. Our trading performance in the nine months to 31 December 2016 demonstrates our commitment to support members during these uncertain economic times to buy homes and save for the future. Gross mortgage lending has increased in the period by 11.0% to £26.2 billion, a market share of 14.3% and member deposit balances have increased by £6.4 billion, a 10.2% market share of balance growth.
“Our profit performance has reduced in line with our expectations and reflects in part the continued margin pressure due to the prevailing low interest rate environment and the conscious decisions we have taken to support our members. Statutory profit before tax in the nine months is £946 million, a decrease of 16% on the same period last year.
“Our capital and liquidity ratios remain strong, underpinning the security we provide to all our members.”
