Building Society says it was forced to post the mark-to-market losses on its
£25.5bn portfolio of treasury assets because of changed accounting rules after
the credit crunch wiped £726m from their market value.
The sums were enough to have wiped out an entire year’s profits had the
losses been crystallised, according to The Times.
But Nationwide emphasised the amount was paper losses only. By holding the
investments to maturity, the building society is confident the losses, which did
not have to be booked through the profit and loss account, would be made good.
Graham Beale, chief executive, said the assets, typically mortgage-backed
securities, had dropped in value because of the liquidity shortage, not because
of any material deterioration in their underlying quality.
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