BUILDING society Nationwide has unveiled plans to develop a range of services for small businesses.
Nationwide, which has previously only hinted at providing financial services to small and medium-sized enterprises, said it wanted to play an increased role in providing credit to an “important part of the UK economy”.
The move comes at a time when Britain’s top five banks come under pressure to provide more credit to struggling businesses.
Nationwide confirmed the plans as it revealed a 10% rise in underlying profits to £304m on a 10% rise in underlying income to £2.1bn.
Nationwide chief executive Graham Beale has previously said that SME lending would be a “good strategic fit’’ for the building society – but corporate customers should not expect loans to be available until late next year.
He said: “We’re already a lender to the commercial real estate sector. We’ve been asked by customers to provide them with a corporate lending facility.
“We just feel it’s a natural extension of what we can do.”
He added: “We’re quite confident there’s sufficient demand.”
The Project Merlin agreement last year was drawn up between the Government and the banks in a move designed to boost lending to SMEs.
Lloyds Banking Group, Royal Bank of Scotland, Santander UK, Barclays and HSBC agreed to increase lending available to SMEs to £76bn and boost lending available to all businesses to £190bn.
The five banks missed gross lending targets for small businesses last year by more than £1bn, but beat the target for all businesses by £24.9bn.
Meanwhile, Nationwide said it increased gross mortgage lending by 44% to £18.4bn in the year to April 4 in a market which grew by only 5%.
More than 24,000 first-time buyers took out a mortgage with Nationwide in the period, compared to 22,200 the previous year.
The mutual maintained its Base Mortgage Rate pledge, which has seen many borrowers revert to a rate capped at 2% above the Bank of England’s 0.5% base rate.
