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NATIONWIDE BUILDING SOCIETY U.S. AND EURO CP RATED 'F-1' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, April 29 /PRNewswire/ -- Nationwide Building Society's U.S. and multicurrency Euro commercial paper (CP) programs are rated `F-1' by Fitch. The two programs have a combined limit of US$2 billion. The credit ratings reflect Nationwide's substantial liquidity, good capital, and important position in the U.K. financial sector. Despite high levels of non-performing loans and weak demand, the society remains profitable. CP investors benefit from a strong legal structure that places senior debt claims ahead of depositors and shareholders.
 Nationwide's broad retail deposit base provides 78 percent of total funding. Like many other societies, Nationwide expects further retail outflows in 1993, but these should remain under 5 percent of current retail funding. Slower loan growth and diverse wholesale funding options mitigate retail funding pressures. Nationwide prudently manages its balance sheet, retaining liquidity of 16 percent of assets, equivalent to 10 times current CP outstandings.
 Because of the property sector's collapse, Nationwide and other societies set aside large provisions in 1992. Equity shortfalls on non- performing residential loans will require further provisions in 1993. However, provisions should remain under 2 percent of loans. Loss provision coverage is somewhat better than other U.K. lenders, reflecting more limited indemnity cover and higher loan-to-value ratios on some properties.
 The deterioration of loan quality has slowed in the 12 months to March 31, 1993. New arrears cases of two to three months fell by 18.5 percent in the period. Management closely tracks mortgage delinquencies and has accelerated collections efforts to restore mortgage payments and avert repossessions. Social benefits for mortgage repayment also reduce the impact of still-high mortgage arrears on cash flow. As of March 1993, non-performing assets including repossessions represented 14.4 percent of total loans, compared to 13.9 percent a year earlier.
 Improved interest margins have partially offset the impact of loan quality costs on earnings. With a cost/income ratio slightly over 50 percent, Nationwide will have somewhat less flexibility to compete with some other building societies. However, the society's cost structure is stronger than a number of U.K. clearing banks. Nationwide will report earnings for the fiscal year ending April 4 on June 8, 1993.
 With total assets of 34.5 billion pounds ($51.3 billion), Nationwide is the U.K.'s second largest building society and the third largest mortgage lender, holding 8 percent of the home mortgage market.
 -0- 4/29/93
 /CONTACT: Ricardo J. Kleinbaum, 212-908-0525, or Marc R. Pinto, 212-908-0618, both of Fitch/


CO: Nationwide Building Society ST: IN: CST SU: RTG

CK -- NY037 -- 2535 04/29/93 10:14 EDT
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Date:Apr 29, 1993
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