(Adds detail, comments)
By Iain Withers
LONDON, Nov 20 (Reuters) - Nationwide Building Society
reported robust half-year profits on Friday despite a
hit from a provision to cover likely unpaid loans due to
coronavirus and losing ground to rivals in Britain's buoyant
mortgage market.
The lender reported a pretax profit of 361 million pounds
($478.47 million) for the six months to September, up 17% from
309 million pounds the previous year.
The bellwether mortgage lender - Britain's second-largest
provider of home loans - said it was boosted by strong demand
for buy-to-let mortgages, although its net lending over the
period dropped to 1.6 billion pounds from 3 billion a year
earlier.
In contrast to its larger rival Lloyds - which
gained market share over the summer amid a coronavirus-driven
boom in people moving homes - Nationwide's share of net lending
over its reporting period fell to 5.2%, down from 9.6% the
previous year. Its market share of gross lending fell to 12%
from 12.3%.
"What we've focused on is lending into certain areas that
our really core to our purposes such as first-time buyers," CEO
Joe Garner told reporters. "We've been quite targeted in our
lending. We don't do market share for market share's sake."
Chief Financial Officer Chris Rhodes said the lender also
lost ground due to a focus on home purchases - which were worst
hit in the early months of the pandemic - ahead of remortgaging
and cited operational challenges in the lockdown.
The lender booked a 139 million pound provision for loans
that may not be repaid due to the pandemic.
The results covered the bulk of Britain's first lockdown and
the reopening of much of the economy over the summer, but did
not capture the impact of more recent economic and social
restrictions.
Rhodes said the group's forecasting also did not take
account of encouraging vaccine news in recent weeks as this came
after the period.
Sara Bennison, the lender's chief product and marketing
officer, said government support packages had limited the impact
of the pandemic on customers.
Only 15,000 of the 246,000 Nationwide customers given
mortgage payment holidays have needed further support beyond six
months, Rhodes said.
(Reporting by Iain Withers; editing by Rachel Armstrong and
Jason Neely)