Nationwide Credit Crunch Victors

by Stewart Douglas

Story link: Nationwide Credit Crunch Victors

UK building society Nationwide has today announced it has performed better as a result of the credit crunch, with customers viewing it as a safe stable alternative in light of the investment disasters and liqudity problems at other leading deposit holders over the course of the summer.

The largest independent building society in the UK reported that it had actually benefited as a result of the credit crunch, unlike solely commercial enterprises with shareholders, as a result of its more cautious approach to investment and attitude towards catering for the needs of its members - the customers.

Deposits in savings accounts over the six months ended September were up by almost 100%, totalling some £4.1 billion, although much of its deposit figures were derived from its acquisition of Portman building society earlier in the year, which has undoubtedly helped add to the perception of Nationwide as a safe haven for consumers.

Much of the savings recorded as incomings in the month of September were thought to be from customers that also held accounts with Northern Rock, as an upshot of the substantial withdrawals that occurred in light of its liquidity shortages, reflecting the heightened consumer perception of the building society.

Nationwide was largely unaffected by the US sub-prime mortgage crash having very little in the way of investments in securitisation options like some other banks.  As a result of its lack of shareholders, Nationwide benefits from a less urgent drive towards profits, which may have helped save it from experiencing difficulties associated with over exposure to sub-prime investments.

Nationwide has forecast that it will continue to grow its market share in the hotly contested mortgage market, estimating a secured 6% of the overall market throughout the course of the next year.  It also anticipated that it would look to continue to grow in order to achieve its targets of 10% market share over the next few years, depending on the progress of external market conditions.