- Nationwide Building Society reported a 40% drop in first-half profit amid a rise in expenses for mis-sold insurance, higher business investment costs and a deterioration in its net interest margin.

Pre-tax profit for the six months through September fell to £309m, down from £516m on-year.

The company's net interest margin, a key measure of profitability, contracted by 11 basis points to 1.12%, back from 1.23%, which it said met its expectations.

Costs rose to £1.13bn, up from £1.10bn, as the company continued to 'invest for the future' and incurred a higher-than-previously-expected bill for the mis-selling of personal protection insurance (PPI).

Nationwide said a transformation of its IT infrastructure was currently underway to simplify and enhance its IT estate and increase capacity as its membership grew.

Membership numbers at the end of September had risen to 3.5m, up from 3.4m at the end of March.

'In line with our expectations, our profits were lower as we invested in meeting the needs of our members, in our service and in our future,' chief executive Joe Garner said.

'As we announced in September, profits were also affected by an additional PPI charge.'

'Our trading performance was in line with our plans.'

'We continued to grow our mortgages, deposits and current accounts, but at a more moderate pace, as we focus on broadening relationships with our members and helping to meet more of their financial needs'

At 8:16am: [LON:NBS] Nationwide Building Society Core Capital Deferred Shs Min 250 Ccds share price was -1p at 163p

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