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Nationwide posts 56 per cent rise in profit

Nationwide, the UK's biggest customer-owned financial service, has posted a 56 per cent jump in annual underlying profit.

The company said its financial position remains robust and the leap in profits was a result of people demanding an alternative to the traditional banks.

According to Nationwide, it has seen a 58 per cent rise in customer numbers, as people switched over from another bank.

Nationwide's chief executive Graham Beale said: "Nationwide is uniquely well placed to meet the demands of the growing number of customers who are seeking a genuine and viable alternative to the established banks."

The bank also plans to issue a new form of so-called loss-absorbing debt in order to further improve its capital position.

Nationwide could potentially raise between £300 million ($454 million) and £500 million through the issue of so-called core capital deferred shares.

Loss-absorbing debt is used by financial businesses to protect themselves against any downturns in the market.

By Gary Cooper