Nationwide puts SME lending plans on ice

The Financial Times reports that the plans to lend to small businesses, which were started in 2011, were not feasible due to the 3% leverage ratio the society must hit by 2015.

In a statement to the FT Nationwide said: “We have previously said that it is our strategic intention to enter the SME banking market and that we will do this at the right time for the society and its members. This remains our intention going forward.”

The society said it has to be more selective about how it invests in the business and was instead choosing to focus on increasing its market share in the current account market from 5.7% to 10%.

Following the PRA’s capital shortfall review in June this year it found that Barclays and Nationwide had failed to the meet the 3% leverage ratio falling short at 2.5% and 2% respectively.

After initially being told it had to achieve the 3% target by the end of 2015 the society was awarded a two year reprieve until the end of 2015.