Financial highlights
* Pre-tax profit up 21% to £426.8 million (April 2003: £353.3
million).
* Total assets up 19% to £101.4 billion (April 2003: £85.4 billion). * The Society's key efficiency measure, the ratio of costs to mean
total assets has fallen for the 15th successive year and now stands at 0.93%
(April 2003: 1.01%).
* Gross capital up 22% to £6.2 billion (April 2003: £5.1 billion).
* General Reserve up 8% to £4.3 billion (April 2003: £4.0 billion).
* Strong solvency ratio remaining at 11.7% (April 2003: 11.7%).
Business highlights
* Net mortgage advances up 81% to a record £13.2 billion (April 2003:
£7.3 billion).
* During the year Nationwide has taken a 12.8% share of net mortgage
advances, significantly higher than par share of 7.9%.
* The Society's mortgage retention levels are excellent with principal
repaid at 1.8 percentage points below par share of 7.9%.
* Mortgage arrears down 28% from April 2003.
* Current account openings up 33%. Nationwide has taken an 8.3% share
of the market for new current accounts against its par share of 4%.
* Credit card openings up 25%.
* Commercial balances up 15% to £12.14 billion (April 2003: £10.55
billion).
* Members have benefited by a record £588 million in the year through
better interest rates and lower charges.
Philip Williamson, chief executive said: "This has been a truly outstanding
year for the Society. Our performance shows that a modern well run mutual
can be extremely successful by putting its customers first and pricing
products fairly, while still generating a healthy level of profit.
Customers are voting with their feet and coming to Nationwide for the great
value we offer, proving that it is possible to play fair and win.
"Our approach to mutuality has helped Nationwide double its asset size to
over £100 billion in the five years since the carpetbaggers tried to
persuade our members to vote for conversion to plc status in 1998. Since
1996 our members have benefited by over £3 billion in the form of better
rates and lower fees and charges and seen their reserves rise from £2.2
billion to £4.3 billion over the same period.
"Net mortgage advances of £13.2 billion, a 12.8% market share, provide clear
evidence that treating all our mortgage customers fairly is definitely
paying off. We have been very successful at retaining existing customers
and attracting new business but we have not compromised quality to fund
growth. Arrears are at a record low and the average loan to value ratio
across our mortgage books stands at around 38%.
"We have also punched above our weight in the credit card, current account
and personal loan markets, generating strong business results. One in five
of our sales is now online or over the telephone and a quarter of our three
million current account holders use our internet banking services. Our
strong focus on efficiency has resulted in further improvements for the 15th
successive year.
"Nationwide has made a real difference by championing the rights of
consumers on issues such as greater credit card transparency and advance
notification of fees at cash machines. We were also delighted to confirm
our commitment to the communities in which we operate by keeping our call
centre operations in the UK and investing in our national network of
branches and agencies."
Mortgages
* Net mortgage advances for the Nationwide Group were £13.2 billion,
compared with the £7.3 billion achieved in the last financial year. Gross
mortgage lending was 40% up at £24.4 billion (April 2003: £17.4 billion).
* During the year the Nationwide Group secured a 12.8% share of the
net mortgage market and a 10% share of the remortgage market, a market we
only entered in 2001.
* Nationwide became the UK's fourth largest mortgage lender,
overtaking Barclays Bank.
* Mortgage retention levels for the Society are excellent with
principal repaid at 6.1% which is 1.8% below the Society's par share of
7.9%.
* UCB Home Loans, the Society's specialist mortgage lender, recorded a
strong performance with gross mortgage advances of £1.9 billion (April 2003:
£1.6 billion).
Asset quality
* Loan to value ratio across the mortgage book is 38%, reflecting
Nationwide's prudent lending approach.
* Mortgage arrears are 28% down on April 2003 and at a 10 year low.
* Possessions are down 60% with only 56 properties in possession.
