No need to fear rate hike: CEO
The boss of the Nationwide Building Society says AMILIES need not fear a small increase in interest rates, as they revealed a nearly three-fold jump in half-year profits to £850 million.
Mutually, those profits will be used to benefit 16.3 million members, including 30,000 new first-time buyers in the past six months.
Outgoing CEO Joe Garner said a widely expected increase in interest rates is not a problem.
“Most mortgage holders are on fixed rates, so they are shielded from the short-term effects of rate hikes. It’s the savers who have the hardest time, profiting if rates go up a bit,” he said. Inflation is a concern, but “the economy is performing better than anyone expected,” he said. “I wouldn’t be too sad about it.”
Mortgage loans rose 5.5 billion pounds to 18.2 billion pounds, though nationwide market share fell from 12% to 11.4%, a sign of how competitive the industry has been lately.
Garner will move on once the board has found a replacement. In the frame in a press report was TSB’s Debbie Crosby, although she would have to persuade the board of her commitment to reciprocity.
Internal candidates include Chief Product Officer Sarah Bennison and Mission Leader Paul Riseborough.
Garner did not comment directly on the possibility of fellow mutual LV = falling in a private equity bid, but said: “Mutuals provide better service, retaining any portfolio we make. It’s not up to me to judge.” , but I am a big supporter of reciprocity.