Nationwide Building Society, the UK's biggest customer-owned lender, said fiscal full-year profit rose 6.8 per cent, held back by losses on credit-related investments.
Net income rose to £495.3 million (€619 million) in the 12 months to April 4th, from £463.6 million a year earlier, the Swindon, England-based company said today in a statement.
Writedowns on credit-related treasury investments amounted to £418.3 million and reduced profit by £102.2 million.
The company said its acquisition of Portman in August to create a lender with 14 million members, is on track to deliver cost and revenue benefits of £90 million a year by 2009 to 2010.
Mortgage lenders are curtailing loans following the seizure of credit markets and a decline in house prices that may reach 7 per cent this year, the Council of Mortgage Lenders said yesterday.
"Whilst the environment will remain challenging, the market now has a much more transparent and realistic view of the cost of risk," chief executive officer Graham Beale said in the statement.
"It remains difficult to predict how long the current market conditions will last." Net mortgage lending fell 40 per cent to £6.7 billion amid higher credit-market costs, while new retail deposits nearly tripled to £9.1 billion following the bailout of Northern Rock.