Strong position in the U.K. mortgage and retail savings markets enhanced by mutual status and pricing policy; Good quality residential loan book; Well managed, consistent strategic approach; and Solid capitalization. Absolute profitability is low, reflecting the mutual pricing policy; and Business reliant upon the strength of the U.K. household sector. The ratings on Nationwide Building Society reflect its strong position in the U.K. mortgage and savings markets, and good asset quality. Asset growth has been brisk over the past three years, but capitalization and funding continue to compare well with peers. Underlying profitability remains satisfactory, despite the strategy of rewarding members through competitive pricing. Management is seeking to improve internal capital generation. Being the U.K.'s largest building society enhances Nationwide's
