Yearly revenue at Nationwide bank, Britain's third largest building society, leaped as the amount of bad financial loans dropped by a third.
Underlying pre-tax profits went up by 30 per cent to ?276m in the year to the start of April as bad debt fees dropped by 35 per cent. Statutory pre-tax profits were reduced, to ?317m from ?341m, the chief culprit being accounting changes.
The strong underlying performance came against the backdrop of a "smaller mortgage and savings" market, Nationwide chief executive, Graham Beale said.
As with other building societies and banks, Nationwide was also forced to deal with"abnormally low interest rates", Beale added.
Moves made by the Bank of England recently, have been carefully watched by observers for any hint of an unexpected interest rate rise, but Mr Beale agreed with the general view in the city of London is that the economic outlook should continue to remain loose for the next four to five months.
"We do not think we will see any move in interest rates until the end of the year, around about November," Beale stated. "By the end of 2013, we may see rates at 2.5 per cent."
The Nationwide also joined other the high street lenders in reserving money for mis-selling payment protection insurance (PPI) claims, accumulating ?16m to pay customers PPI compensation.
Lloyd's TSB was in the news recently when it revealed that it was putting away over ?3bn to deal with potential claims, while HSBC, Barclays and RBS have declared they intend to make available small amounts of money.
Nationwide also added that its sales of PPI were relatively low compared to the other banks.
"We had a rigorous sales process in place," Mr Beale said. "Consequently, our own provision for customer redress, with a charge for the year of ?16m, compares very favourably with the several billions announced by the banks during the past month."
"Customer service is very important to us," Mr Beale said, bringing attention to the fact that recent PPI claims information from the Financial Services Authority proved that Nationwide building society made up less than 3 per cent of all PPI complaints handled by the FSA.
For more information head to: www.bestppiclaims.com
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