Nationwide Building Society revealed its earnings have fallen this year after dishing out cash to members and lending less for mortgages.
The Swindon-headquartered building society reported a pre-tax profit of £486m for the six months to the end of September, down from £568m in the same period a year ago.
Total net mortgage lending was £4.7bn for the half-year, less than the £6.3bn last year, Nationwide revealed. The mutal said the average loan-to-value of new residential mortgages (by value) over the period was 72%.
Dame Debbie Crosbie, Nationwide’s chief executive, said the building society was “number one for growth in mortgages and retail deposits”, and highlighted that “more people switched their current accounts to us than to any other brand”.
"All of this, combined with the benefits of our acquisition of Virgin Money, has led to an increase in underlying profit before tax, while delivering £1.2bn of value to our members," she said.
Nationwide said its member financial benefit decreased to £780m for the half year - down from £950m a year earlier - mainly due to the narrowing of its mortgage customer rate differential to the market.
In May, the board announced its third Fairer Share Payment of £409m. The payment - in addition to the £780m member benefit - was made in June to eligible members who had a qualifying current account plus either qualifying savings or a qualifying mortgage.
Elsewhere, underlying administrative expenses increased by £826m to £1.9bn, which Nationwide said was driven by the inclusion of Virgin Money costs.
The lender added that it would remain "vigilant" to ongoing economic uncertainty and was "continuously assessing" the potential impacts on borrowers and the credit risks across lending portfolios.
"Borrowers are likely to continue experiencing affordability pressures; however, arrears rates are expected to remain well below the industry average," the mutual said.
"Despite labour market conditions having softened, the credit quality of our lending portfolios, and the adequacy of our capital resources, remain strong."
Last week, Nationwide pledged to keep every one of its 696 Nationwide and Virgin Money branches open until at least 2030.
