It has been revealed that £726 million has been wiped off the assets of Nationwide Building Society due to the credit crunch.
The Times reports that Nationwide was forced to reveal the losses due to accounting rules, but the firm says the drop in value is down to a liquidity shortage, not because of deterioration in their quality.
Nationwide has said it has chosen to take a "conservative and sustainable approach" to lending, which resulted in a drop in its market share from 11 per cent to 7.1 per cent.
It plans to stick to these lending arrangements until it had confidence that the funding market had returned to normality.
Graham Beale, chief executive of Nationwide, told the newspaper that "highly geared structured investment vehicles" suffered because they were not able to borrow enough to cover funding costs.
Nationwide recently found that less than half of people who currently hold an ISA will put more money into it when the limits are increased.
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