Nationwide, the country’s biggest building society, said the UK was “moving towards the end of free banking”, although it had no current plans to start charging customers.
Philip Williamson, chief executive, said moves by regulators such as the Office of Fair Trading to “fiddle around” with pricing mechanisms in areas such as current accounts represented a fundamental market shift.
He said: “We don’t have plans to introduce charges but we will have to keep an eye on the competition. People believe it costs nothing to offer banking services but there are costs involved.”
Earlier this week, First Direct, the internet bank owned by HSBC, said it would charge customers £10 a month if they failed to pay in or maintain a balance of £1,500 a month.
Nationwide, which recently announced a take-over of Portman Building Society, reported interim profit up 30 per cent to £336.4m in the six months ended September 30. This compares with £254.8m in the same period last year.
The mutual said it had aggressively expanded into home loans after calling the top of the housing market too early last year and deliberately holding back on new lending.
Nationwide took a 10.5 per cent share of net new mortgage lending compared with its traditional 8.5 per cent share of net lending.
Net lending rose almost 50 per cent in the period to £5.9bn, with commercial lending up 67 per cent to £3.6bn.
Nationwide said that, based on value, the proportion of lending to first-time buyers had increased to 21 per cent compared with 15 per cent in the year ended April 4.
The mutual said it had lifted its income multiples from 3.5 to 4.25 times salary. Buy-to-let lending remained buoyant.
Mr Williamson said he believed house prices would rise by 5 to 6 per cent in 2007.
“Residential property is still very buoyant and there is a shortage of supply and there are still low interest rates and, while there is an increase in unemployment, this has been outweighed by new jobs being created elsewhere. Immigration is also bolstering demanding for buy-to-let properties.”
Bad debt charges in the half-year jumped from £34.5m to £56.3m in the same period last year.