The mutual reported underlying profit of £469m for the year ending 4 April 2020, plunging from £788m in the previous year.
Prior to the Covid-19 crisis, a fall in profits had already been anticipated by Nationwide because of investment in technology and the competitive mortgage backdrop.
However, the society set aside £101m to deal with the financial fallout from the virus, with £51m of provisions for residential mortgages, £43m for consumer banking and £7m for commercial lending.
Competitive mortgage market
Nationwide said over the year it had grown mortgage lending at an “intentionally slower rate” with gross lending for the year coming in at £30.9bn, down 16 per cent from £36.4bn in 2019.
Mortgage market share of the lender fell to 11.4 per cent, down from 13.4 per cent over the year.
One in six first time buyers used the lender during the period it said, while Nationwide added that it grew lending to landlords through its subsidiary The Mortgage Works.
Competition in mortgages and the bank base rate cuts eroded net interest income, with net interest margin falling to 1.13 per cent from 1.22 per cent year on year.
In response to the coronavirus outbreak, Nationwide pledged that none of its mortgage borrowers impacted by Covid-19 will lose their home in the next 12 months and that no jobs will be lost at the society in 2020.
Joe Garner, chief executive of Nationwide Building Society, said: “Nationwide Building Society is a mutual organisation, founded on the belief that we can achieve more by acting together than we can alone.
“This principle is guiding our response to the pandemic, where we are doing all we can to protect people’s homes and jobs.
“We are helping members in financial difficulty with payment holidays on mortgages and loans and interest-free overdraft periods, and we have promised that no mortgage member will lose their home over the next 12 months due to the impact of the coronavirus.
He added: “We believe that the character of any organisation comes very much to the fore in times like these, and we have been making our decisions very much with this in mind.
“While the coronavirus impacted our profitability in the last few weeks of the year, there was pressure on margins even before it hit.
“Notwithstanding this, we achieved a great deal during 2019/20. We have record membership and grew the number of people we helped into a home, to save and to manage their money.”