National accolades for clients who default on their loans after a strong summer Business

The UK’s largest construction company, Nationwide, is bracing for customers to struggle to repay their loans after setting aside £ 139million for bad debts due to the pandemic.

The mutual, which has received more than 100,000 calls from its members each month since the pandemic broke out in March, doubled its allowance for loan losses by £ 57million a year ago.

Despite the uncertainties, its pre-tax profits rose 17% to £ 361million.

The figures cover the six-month period from April to September, covering the summer and most of the first lockdown, but that means the impact of this latest lockdown is not included. Most banks reported a surprisingly strong third quarter, with Bank of England chief economist Andy Haldane saying in late September that the economy had recovered “much faster” than anyone else. had planned over the previous four months.

However, the numbers have been dampened by government support schemes, which remain in place and have so far reduced bad debts. Bank executives have been discussing with Treasury officials for months how to preserve their reputation when these schemes are lifted and they must start chasing debt.

Even before the announcement of a new foreclosure, lenders feared that the end of taxpayer-funded support schemes would create a legion of people unable to pay their mortgages, hurting house prices and leading to loan accumulation. doubtful.

Joe Garner, chief executive of Nationwide, said it was very difficult to predict what would happen to the economy, jobs and the housing market in the wake of the pandemic and Brexit.

“Looking ahead, as government support wanes, it is clear that many more people are at risk of losing their jobs and their families’ finances will be strained,” he said. he declares.

Nationwide is a member-owned company, which means that it is not under the same pressure to generate returns as the big banks owned by its rival shareholders.

He granted 246,000 mortgage payment holidays and pledged that no one will lose their home in the next 12 months due to the impact of the coronavirus.

His results come a day after pledging not to close a branch in any UK city until at least 2023, beating the general industry trend as banks continue to close branches across the country.

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This notice was published: 2020-11-20 14:26:56