NU Online News Service, April 29, 2003, 11:58 a.m. EDT – Nationwide Financial Services Inc., Columbus, Ohio, is reporting $72 million in net income for the first quarter on $989 million in revenue, compared with $106 million in net income on $785 million in revenue for the first quarter of 2002.

Nationwide sells individual annuities, institutional products and life insurance.

The individual annuity unit generated $38 million in operating income for the latest quarter on $346 million in revenue, compared with $53 million in operating income on $288 million in revenue. The unit attracted $733 million more in cash than it lost, up from a net inflow of $628 million for the first quarter of 2002.

Nationwide notes that the difference between what it can earn in interest and the rates it must pay the holders of the fixed-rate annuities shrank during the quarter because of the decline in interest rates. The interest spread margin shrank to 1.69 percentage points, from 2.03 percentage points.

The institutional unit generated $50 million in operating income on $273 million in revenue, compared with $59 million in operating income on $270 million in revenue. Net inflows of cash increased to $640 million, from $365 million. The interest spread margin for the institutional business fell to 1.94 percentage points, from 2.1 percentage points.

The life insurance unit generated $63 million in operating income on $343 million in revenue, up from $41 million in operating income on $215 million in revenue. Sales increased 11%, to $555 million.