Nationwide Building Society has seen half-year profits tumble as it counted the cost of writedowns and a technology investment.
Statutory profit in the six months to September 30 fell over 17% to £516 million, which it put down to £135 million of “asset write-offs and incremental technology spend”.
Underlying profits were down by 22% to £460 million.
Earlier this year, Nationwide announced another £1.3 billion technology investment as it looks to take the challenge to digital rivals.
At the time, the building society said the cash injection will help “simplify its technology estate and build new technology platforms to enable growth and diversification, and drive forward digital, data and analytic strategies”.
Chief executive Joe Garner said on Thursday: “Our first-half profits were lower than last year because we have chosen to increase our investment in the future of our society.
“As a mutual, we do not judge our success by profit growth alone, but by how we manage our profits to serve our members’ interests.”
Nationwide has been battling fierce competition in the mortgage market, but said it helped a record 40,500 first-time buyers purchase a new home in the first half of the year.
Total gross mortgage lending nudged up to £17.3 billion from £16.7 billion and the group maintained its share lending at 13%.
But finance chief Mark Rennison warned that the competitive market will “lead to further pressure on margins in the second half of the year”.
He added: “If we exclude the charge we’ve recognised for asset write-offs and incremental technology spend, profits are in line with last year and we have held costs flat while servicing rising business volumes.
“We have continued to make the society more efficient and are not only on track to deliver our targeted sustainable saves but have also set a more ambitious target for saves by 2023.”
Nationwide’s five-year investment plan is aiming for “sustainable” cost savings of £500 million by 2023, which extends its previous target by a further £200 million.