Britain's Nationwide Building Society today reported a 15% fall in profits for the year to April 4, as intense competition in the home lending market and increased spending on digital banking services ate into its margins.
The bellwether mortgage lender said its net interest margin - a closely-watched measure of underlying lender profitability - fell to 1.22%.
This was down from 1.31% the previous year and down from 1.26% the prior quarter.
The lender reported pre-tax profits of £833m, down from £977m the previous year.
A £227m charge related to improving the building society's digital banking services weighed on earnings.
Nationwide CEO Joe Garner said that the British economy had slowed but was proving robust, adding that he expected economic activity to pick up once uncertainty about Britain's departure from the European Union was resolved.
The lender is also looking to expand its business banking services after securing a £50m grant from a fund aimed at improving competition in the market earlier this month.
"The economy has proved more resilient than many expected, with continued healthy gains in employment and a gradual rise in earnings contributing to solid rates of household spending," the lender's CEO said.