Nationwide, Britain's biggest customer-owned lender, today warned of increasing competition, as banks begin to lend again after several years spent slimming down and building capital reserves.
Britain's third-biggest provider of home loans and savings products, Nationwide reported an 83% rise in underlying profit as the margin it made on loans improved.
But the group said overall lending, including home loans, was lower than in the same time last year.
Chief executive Graham Beale said Nationwide had seen increased competition from Lloyds Banking Group and Santander in particular, adding that banks in general were lending more to individuals.
"They've been deliberately out of the market for a considerable period of time now and we've seen them re-enter - so inevitably I think we're going to not have quite the same freedom within the marketplace that we've enjoyed for quite a period now," Mr Beale said.
Nationwide reported an underlying profit for the six months to the end of September of £606m.
The UK lender benefited from an improvement in its net interest margin - the difference between the interest it lends at, and what it pays to savers - which rose to 1.48% from 1.13% the year before.
Mr Beale said Britain's housing market was beginning to slow down after a strong recovery in the latter half of 2013 and the beginning of 2014. However, he said there was unlikely to be any dramatic slowdown.
Nationwide said that it had increased its share of the personal current account market to 6.6% from 6% a year ago.
The lender is offering interest of 5% a year on some accounts to entice customers and help it to reach its target of a 10% market share.
Nationwide is seeking to challenge the dominance of Britain's four biggest banks and pick up customers disillusioned by scandals including the mis-selling of loan insurance and the attempted rigging of foreign exchange markets.
However, the big four of Lloyds, Royal Bank of Scotland, Barclays and HSBC continue to hold about 77% of Britain's 65 million personal current accounts, according to Britain's competition watchdog which is investigating the industry.
