"Financing projects from £50,000 to £100 million"

Nationwide considers move into commercial finance for SMEs

Nationwide considers move into commercial finance for SMEs

Nationwide, the UK’s largest mutual society, has confirmed that it is looking to expand into commercial lending for small and medium enterprises, and that it it interesting in buying up 316 RBS branches to speed up the process.

The society has recently announced a fall in profits for the half-year to September on the previous year owing to bad commercial property loans and compensation claims for PPI insurance.

However, strong mortgage lending thanks to the Funding for Lending scheme, and a rise in market share for current accounts as customers have sought alternatives from scandal-struck banks, has led to a rise in income.

The society now sees the 316 branches available from the Royal Bank of Scotland as a useful expansion opportunity to support its commercial lending arm, which it aims to launch in 2014.

Nationwide’s chief executive, Graham Beale, said that he was monitoring the sale of the RBS branches "very, very closely".

"Strategically we want to enter into the SME space. If there's anything I could do that would accelerate our strategy it would be of interest," he told Reuters.

The RBS group is being forced to offload the branches by the European Commission due to the taxpayer-funded bailout it received during the financial crisis.

A deal with Santander for the branches broke down recently, however, owing to compatibility issues with RBS' antiquated computing systems. The breakdown of the deal came at a cost of £52 million to the Spanish bank.

Wednesday, 28 November 2012 12:04
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