* Nationwide Q1 profits down 13 pct
* Says competition, margin pressure to continue
* Some customers show signs of squeezed incomes (Recasts, updates CEO quote, adds context)
By Emma Rumney
LONDON, Aug 10 (Reuters) - Britain’s Nationwide Building Society reported its sixth straight period of falling pre-tax profits on Friday, and said it expects the intense competition that has dented performance to continue.
Lender margins have also been squeezed by a sustained period of low interest rates, which rose for only their second time since the financial crisis last week.
Nationwide Chief Financial Officer Mark Rennison said the building society’s net interest margin - a key measure of lenders’ profitability - was expected to continue to decline gradually over the next 18 months, after which it would flatten.
That outlook was unchanged as it already factored in the Bank of England rate hike, Rennison told Reuters by phone.
Nationwide is one of the country’s top three mortgage lenders and a bellwether for the health of consumer finances.
But unlike rival lenders like Lloyds Banking Group which have a goal of delivering ever higher profits to shareholders, it operates as a society of members focused on service delivery.
It said rising rates and other pressures on disposable income were prompting some change in consumer behaviours.
Some customers were making smaller, more manageable purchases rather than buying their groceries in one go, Chief Executive Joe Garner told Reuters.
“They’ll make a greater number of shopping trips... Some people are filling up with petrol more often, not spending any more in total but making a greater number of trips,” he said.
“It’s not widespread, but just little indicators that some people are making conscious adjustments to make sure that they can live within their means.”
Garner noted that the results showed no signs of a deterioration in the economy, with first quarter impairments at 13 million pounds ($16.61 million) - less than half of their level during the same period last year.
Nationwide, which is facing intense competition in the market for home loans, said its outlook for the full-year remained unchanged. It expects the economy to grow at a modest pace of the next 12 months and that the housing market will remain relatively subdued, it said.
It reported a pre-tax profit of 281 million pounds for the period, down from 322 million pounds in 2017.
Nationwide’s gross mortgage lending rose 3.7 percent to 8.4 billion pounds from 8.1 billion, breaking a streak of interim declines. ($1 = 0.7827 pounds) (Reporting by Emma Rumney; editing by Jason Neely and Emelia Sithole-Matarise)