NATIONWIDE said it is facing much tougher competition as it attempts to retain its position as a “top three” savings and mortgage provider.

Announcing a sharp rise in half-year profits, the UK’s biggest building society highlighted an increase in competition across most products and services as rival firms place more emphasis on their retail banking activities.

But the group has vowed to meet the competition “head on” as it looks to maintain its market share as a top three savings and mortgage provider. At the end of September, its share in mortgages and savings was 11.9 per cent and 10.6 per cent respectively.

It said that the house market has now started to slow down after annual price increases peaked in the summer, although the market remains healthy.

Underlying profits were £606 million in the six months to September 30, a rise of 83 per cent on a year earlier.

This came as a result of lower funding costs and a further decline in bad debts and provisions for liabilities and charges.