Nationwide say tax changes could cost them £300m
There's a lot of changes going on in the world of tax, with shops saying new rules mean that ATMs may not be free any more. Now, Nationwide are saying that recent tax changes could cost them £300m over five years, which could well hit lending.
They say that changes to banking taxes which were announced in the Budget are going to cost them the equivalent of the capital needed to support £10bn of lending. Big talk indeed.
And then, passive aggressively, Nationwide told everyone how well they were doing, basically winking at the Chancellor with a '...and we won't be able to help the country's growth if you start playing silly buggers...'.
In the first quarter, profit before tax increased to £379m, up from £253m the year before. Chief exec Graham Beale said: "Nationwide accounted for more than a quarter of total net lending to the UK housing market."
However, thanks to changes to the bank levy, and the addition of an introduction of a tax surcharge on banks, could hit Nationwide's lending over five years. What are these changes? Well, George Osborne announced that the annual levy that banks pay on their balance sheets is going to be reduced from 0.21% to 0.1%, with the introduction of an 8% surcharge on banks' profits.
Beale reckons that this stance will be useful to international banks in the UK, but detrimental to building societies.
"This represents a missed opportunity to support diversity by acknowledging that building societies are different to banks and to recognise the contribution Nationwide and other mutuals make by lending to the UK economy, and the housing market in particular," he said.