NATIONWIDE Building Society – which employs almost 1,200 people locally – has seen half-year profits fall by 40 per cent.

The mutual society, which has an administration centre on Bournemouth’s Richmond Hill, said its bottom line was hit by payment protection insurance (PPI) and investments made in its branch network.

Nationwide recently announced that it would close four Dorset branches at the end of January – at Boscombe, Canford Cliffs, Highcliffe and West Moors. The area will still have more branches for the size of its population than the rest of the country.

The society posted pre-tax profits of £309million for the six months to September 30, down from £516m a year earlier. Underlying pre-tax profits fell 33 per cent to £307m.

Alison Robb, the society’s deputy chief financial officer, told the Daily Echo: “We as a building society are owned by our members. We’re not an organisation where the sole target is to derive the highest profit. That gives us the ability to make those long-term decisions.

“There’s no doubt it’s a very challenging economic environment, combining low interest rates and a competitive mortgage market. A year ago we made a substantial commitment around investment in the business. We’re now in the second year of that programme.”

Nationwide’s “branch promise” says it will keep a high street presence until at least May 31, 2021 in every town and city where it had a branch in March of this year.

It has 15 branches in a 10-mile radius of central Bournemouth and the four planned closures will still leave the area with more for the size of population than the rest of the country.

Ms Robb said: “For a small number of those branches, we’ve seen a concerted reduction in the level of activity. When you look at that, combined with the investment needed for those branches to be fit for the future, we made the difficult decision to close branches.”

The society is investing £7m in the remaining local branches.

Ms Robb said branches such as Christchurch remained well used, while the Winton branch is shortly to reopen after refurbishment.

As well as the costs of investing in the business, Nationwide saw profits hit by PPI claims.

“There was a deadline in the summer for any claims for PPI, set by the regulator. That led to what I can only describe as a massive influx of queries,” said Ms Robb.

“A lot of queries turned out not to be products that were sold by Nationwide.”

She said the £36m of refunds to customers who were mis-sold PPI was “very modest” compared with the rest of the industry.

Nationwide has an exceptionally high membership in Dorset, partly because of its takeover of the Bournemouth-based Portman Building Society in 2007.

Ms Robb said the town continued to be important to the business. “The administration centre is particularly important for us because we run a lot of our buy-to-let mortgage business from Bournemouth,” she said.

“It’s a very, very experienced team, very high quality work and they really support that part of the business, which is really important. When you think about the number of people across the country who are renting their own home, buy-to-let is a really important part of the residential market.”