Nationwide to lend to SMEs

The Nationwide Building Society announced a big increase in lending in the last year and said it would move into the small and medium-sized enterprise (SME) market.

The mutual increased its gross lending by 44% to £18.4bn in the year to the end of March.

The rise compared to a 5% increase in the overall UK mortgage market.

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It also saw savings receipts grow by 67% to £1bn, compared to the year before.

Net mortgage lending was £2.7bn, which was up from a net repayment of £3.5bn the year before.

It added that it had increased the number of mortgages for first time buyers to one 24,000.

Nationwide said that 'in the coming years' it would develop and offer a full range of financial services to SME so it could play "an increasing role in providing credit to an important part of the UK economy".

"By doing so we aim to support more needs for more customers and provide a diversified business mix that reduces our reliance on margin income," said Chief Executive Graham Beale.

The firm reported total underlying income was up 10% to £2.14bn, with profits up 10% to £304m.

Bad loans had stayed flat at at £428m, compared to £425m the year before, it said.

However, it added that it expected both the housing and savings markets would be broadly flat until the economy recovers.