Nationwide unveils SME lending plan

Nationwide unveils SME lending plan

Nationwide announced plans to offer lending facilities to SMEs

Nationwide announced plans to offer lending facilities to SMEs

Nationwide announced plans to offer lending facilities to SMEs

First published in National News © by

A new player in the small business lending market is set to emerge after building society Nationwide unveiled plans to build up a range of services in the coming years.

Nationwide, which has previously only hinted at providing financial services to small and medium-sized enterprises (SMEs), said it wanted to play an increasing role in providing credit to an "important part of the UK economy".

The move comes at a time when SME lending remains under the spotlight following pressure on Britain's top five banks to provide more credit to struggling businesses.

Nationwide confirmed the plans as it revealed a 10% rise in underlying profits to £304 million on a 10% rise in underlying income to £2.1 billion.

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.

"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," he said. "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 banks in a move designed to boost lending to SMEs.

Lloyds Banking Group, Royal Bank of Scotland, Santander UK, Barclays and HSBC agreed with the Government to increase lending available to SMEs to £76 billion and boost lending available to all businesses to £190 billion.

The final figures confirmed that the five banks missed gross lending targets for small businesses last year by more than £1 billion but beat the target for all businesses by £24.9 billion.

Meanwhile, the building society said it increased gross mortgage lending by 44% to £18.4 billion in the year to April 4 in a market which grew 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.

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