NATIONWIDE Building Society, which employs around 1,000 people locally, has seen profits fall for the second year in a row amid “intense competition”.

The society has also said it expects the UK to see “subdued but steady” economic growth over the next couple of years, amid uncertainty over Brexit.

It reported a 7.3 per cent drop in bottom line profits to £977million for the year to April 4.

Although it pointed to record “gross prime mortgage lending” of £29.4billion, net lending was £5.8bn, down from £8.8bn the previous year. Nationwide said this reflected high levels of competition.

Savings deposits also grew more slowly, up £3.5bn against growth of £5.8bn the previous year.

Underlying profits fell 0.8 per cent to £1.02bn.

Last year, Nationwide saw annual profits fall 23 per cent as it moved to protect savers from rock-bottom interest rates.

Chief executive Joe Garner said growth was expected to be 1-1.5 per cent over the next two years. He said the squeeze on incomes was set to ease as inflation fell.

Mr Garner added: “The UK economy has proved considerably more resilient than some people feared immediately after the Brexit referendum, though the pace of growth is likely to remain relatively subdued, reflecting ongoing Brexit uncertainties.

“With economic growth expected to be modest over the next two years, inflation is likely to moderate, gradually reducing the squeeze on household budgets. Subdued growth may mean a small rise in the unemployment rate from recent 43-year lows and only gradual, limited interest rate increases by the Bank of England.”

He said the society anticipated “modest growth in its core product markets”.

“With employment growth expected to slow and pressure on household budgets fading only gradually, mortgage lending is likely to rise at a fairly pedestrian pace,” he added.

“While demand in the housing market looks set to remain subdued, lack of supply will provide support for prices. We expect the mortgage market to remain extremely competitive. Consumers have been saving less, but we expect household deposit growth to pick up a little, to around four per cent a year.”

The society employs around 800 people at Portman House in Richmond Hill, Bournemouth.