Business

Nationwide increases mortgage lending by 44%

Nationwide branch

The Nationwide, the UK's largest building society, says it increased mortgage lending sharply last year and is now looking at lending to companies.

Mortgage lending rose 44% to £18.4bn in the year to 4 April, with the number of first-time buyer loans up 9% to 24,000.

Nationwide also said it had set aside £103m to cover potential claims for mis-sold personal protection insurance (PPI), compared with £16m a year ago.

Profits fell from £317m to £203m after a number of one-off costs.

These included £75m for the Financial Services Compensation Scheme and the bank levy, higher than last year's £50m. Other exceptional costs included £61m to cover restructuring measures.

It said its underlying profit for the year was £304m, up 10% from £276m last year.

'Natural extension'

The society said it was planning to begin lending to small and medium-sized businesses (SMEs).

Nationwide's chief executive, Graham Beale, said the move was in response to demand from existing borrowers.

"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."

SMEs have complained that, despite moves to boost bank lending, there is a scarcity of available credit.

The government drew up an accord, dubbed Project Merlin, between it and the main High Street banks to encourage them to provide more loans to SMEs.

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