THE Nationwide Building Society yesterday said it would like to follow the pioneering move of First Direct and impose current account charges.

Graham Beale, Nationwide’s finance director and chief executive-elect, said: “In an ideal world, if you look at the costs [of running current accounts], we’d be sharing some of that cost with those people enjoying the services.”

Mr Beale said: “In the medium term, I wouldn’t rule it out.” It was “inevitable” that banks would want to recoup some current-account costs, he said.

Nationwide operates current accounts for 3.9 million customers and has been signing up new customers at the rate of 1,600 a day, many attracted by its 4.25 per cent interest rate.

HSBC-owned First Direct plans to impose a £10-a-month charge on current account customers putting less than £1,500 a month into their accounts.

Mr Beale appeared to favour a different charging structure, suggesting that it was people using their accounts the most, by volume of transactions, who should be bear the cost. However, he said that there were no immediate plans to introduce charges.

Nationwide reported a rise of 20 per cent in underlying operating profits, to £306 million, in its half year to September, aided by strong mortgage demand. Bad debt increased by 63 per cent to £56.3 million as the building society experienced more customers defaulting on credit cards and personal loans.

Nationwide criticised some financial advice firms for encouraging borrowers to make individual voluntary arrangements (IVAs), which let borrowers walk away from some of their debts. So far this year, 1,750 Nationwide customers have opted for IVAs, against 852 in the whole of 2005. Mr Beale said: “It is a concern.” Some “less reputable firms” were giving “questionable advice”, he said. Agencies arranging IVAs took fees and customers ended up with tarnished credit records.

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