Nationwide is the UK's fourth-biggest mortgage lender

The UK's largest building society earned �652m in the year to 4 April, as it lent customers �10.6bn to purchase property - a rise of 92.7%.

But the firm - which is merging with Portman later this year - said a string of interest rate rises would lead to a "cooling" of the UK housing market.

Bad debt grew in the year as borrowers struggled with repayments, it added.

Nationwide said it was now rejecting 60% of requests for unsecured loans as it battled to rein in its arrears.

Growth predicted

"We're being much more careful about the business we're bringing onto the balance sheet," chief executive Graham Beale said.

The UK's fourth biggest mortgage lender also said that it was upbeat about the future of the housing market, despite interest rates having risen four times in the last eight months and being tipped to increase again.

Price growth of property would be between 5% and 8% in the next year, Nationwide said.

The building society's merger with Portman is set to be completed in August, with about 900 redundancies expected over two years.