Nationwide profits fall 16% to £946m as 'economic uncertainty' continues

Nationwide has reported falling profits amid what it called a period of "sustained economic uncertainty" and rock-bottom interest rates.

The building society said statutory pre-tax profits in the first nine months of the year dropped 16% to £946 million.

It expects UK economic growth to slow over the next two years and ultra-low interest rates to "put pressure on margins and profit", with chief executive Joe Garner flagging "sustained economic uncertainty".

The Bank of England halved rates to 0.25% and unleashed a mammoth economy-boosting package in August to see off the threat of an expected sharp slowdown.

But Mr Garner said trading in the third quarter remained "strong" and that gross mortgage lending increased by 11% to £26.2 billion in the nine months to December 31, resulting in a market share of 14.3%.

Deposit balances increased by £6.4 billion.

Mr Garner added: "Our performance in the third quarter reflects a continuation of our strong trading performance announced at the half-year.

"In a period of sustained economic uncertainty, our commitment to serve our members remains steadfast and true to our core purpose. We continue to take conscious decisions to support our members, delivering market-leading service and highly competitive products, which has led to a financial performance in line with our expectations."