A last-minute surge of PPI claims has hit profits at Swindon-based building society Nationwide, which have fallen by 33 percent for the first half of its financial year.
Increased investment also drove down pre-tax profits to £307 million said the mutual, which is not under the same pressure as major banks to deliver greater returns to shareholders and has prioritised its technology investment and expansion into business banking.
Costs rose from £1.10 billion to £1.13 billion as the company continued to "invest for the future."
In some good news, membership numbers rose from 3.4 million to 3.5 million.
"In line with our expectations, our profits were lower as we invested in meeting the needs of our members, in our service and in our future," said chief executive Joe Garner.
"As we announced in September, profits were also affected by an additional PPI charge. Our trading performance was in line with our plans.
"We continued to grow our mortgages, deposits and current accounts, but at a more moderate pace, as we focus on broadening relationships with our members and helping to meet more of their financial needs.
"As a member-owned building society we continue to make decisions in our members' interests, to give value to members and invest in the future."