Nationwide boss defends pay as cooling housing market hits profits

The chief executive of Nationwide has defended his £2.3m pay packet as the building society posted a fall in profits and warned of a “subdued” UK housing market in the months ahead.

Statutory pre-tax profits at Nationwide fell to £281 million in the three months to 30 June, from £322m over the same period last year.

However, it noted that it was up against tough comparative figures, with last year’s numbers boosted by its £26m Vocalink disposal.

Underlying profit for the quarter was also lower, however, coming in at £270m, down from £301m last year.

However, the building society revealed a rise in mortgage lending and savers’ deposits,

The number of new accounts opened over the period was 186,900, down from 202,000 a year earlier, though member deposit balances grew by £4.2 billion thanks to a strong performance from individual savings accounts (ISAS).

Gross mortgage lending lifted 3.7 per cent to £8.4bn.

Chief executive Joe Garner, who trousered an £855,000 salary, £903,000 bonus and £342,000 towards his pension in the year to April 4, said he expected tough competition in the months ahead.

He said: “Our outlook is unchanged from the full year, and we expect the economy to grow at a modest pace over the next 12 months.

“We are observing consumers adapting their behaviours in response to the pressure on disposable income.

“The housing market looks set to remain relatively subdued with house prices broadly flat in 2018. Against this background, we also expect intense competition to persist in our core markets.”

Garner noted that consumer expectations of service were continuing to “evolve rapidly”, as digital technology transforms how people manage their money.

“Therefore, we are progressing the review of our technology strategy to ensure Nationwide stays well ahead of future needs, and that we continue to pioneer legendary service in a digital age,” he added.

Defending his remuneration package, Mr Garner said it is less than many blue-chip firms’ bosses earn.

He stressed that his pay was similar to a mid-ranking FTSE 100 boss, and Nationwide was a major tax contributor.

He said: “Nationwide is the 11th-highest taxpayer of all UK firms.”