NATIONWIDE, the UK’s biggest building society, has revealed plans to expand into small business lending.
The mutual said its entry into small and medium-sized (SME) business lending is a “natural extension”.
Nationwide also reported a 36 per cent plunge in pre-tax profits to £203m in the year to the start of April, after the impact of regulatory and restructuring charges.
On an underlying basis it delivered a 10 per cent surge in profits to £304m.
The mutual ramped up its mortgage lending by 44 per cent to £18.4bn, and took its share of the mortgage market from 9.5 to 13 per cent.
Total underlying income was up 10 per cent to £2.14bn.
It also took another £103m charge to cover mis-sold payment protection insurance.
Nationwide recently launched deposit accounts for businesses, and corporate affairs director Graeme Hughes said it hopes to attract these firms with its SME loan proposition.
“It’s trying to work backwards from the local small businesses we think need that type of facility,” he said, adding details have yet to be finalised. “It’s building on what we already do.
“We are in 700 locations and it’s a natural extension. We think there’s a lot of pent-up demand.”
The launch is not imminent and will be subject to “prevailing market conditions”.
Mr Hughes said it will include some commercial property lending, but this is likely to be a small part.
The group’s £21.5bn commercial property portfolio made a £196m loss in 2011/12, after being hit by £247m in impairments.
Its percentage of residential mortgages three or more months in arrears fell to 0.73 per cent from 0.77 per cent in 2010/11, and below the 1.96 per cent industry average.
Skipton, Leeds and Yorkshire building societies all said they have no plans to expand into SME lending.