Nationwide Building Society showed the banking industry a clean pair of heels yesterday, reporting that it is sharply increasing its mortgage lending and offering hope to small businesses that are starved of credit for the first time.
The chief executive Graham Beale pledged to "take the banking industry head on" with its move into the market for loans to small and medium-sized firms.
He said he hoped the scheme would aid the economy as much as it does his organisation.
The mutually owned outfit said mortgage lending in the year to April was up 44 per cent to £18.4bn, a sign of its competitiveness and of how tight bank lending has been. The society noted it helped 24,000 buyers buy their first home, an increase of 9 per cent on the year before.
The figures come as the big banks remain under attack for failing to provide loans to boost the housing market and failing to support British businesses despite receiving multi-billion pound bailouts from the public purse. Mr Beale 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."
Christopher Shaw of alternative finance specialists Platform Black welcomed the news: "The most recent report from the Bank of England confirms once and for all what any company director knows: that SMEs just aren't getting credit and, worse still, are having their overdraft facilities cut or pulled."
Profits at the UK's largest building society 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.
The underlying profit for the year was £304m, up 10 per cent from £276m last year.Reuse content