Profits up 10pc at Nationwide

NATIONWIDE today offered a lifeline to small businesses as it revealed a big hike in profits and an increase in loans to homebuyers.

The building society unveiled a 44 per cent increase in mortgages in the last financial year, and said it had provided loans to 24,000 first-time buyers.

That figure is up nine per cent on the year before.

And Britain's biggest customer-owned financial services group, which has prev- iously only hinted at providing financial services to small and medium-sized enterprises, said it wanted to play an increasing role in providing credit to an "important part of the UK economy".

Nationwide confirmed the plans as it revealed a 10 per cent rise in underlying profits to £304 million on a 10 per cent rise in underlying income to £2.1 billion.

The lifeline it announced for firms today comes at a time when there is pressure on Britain's top five banks to provide more credit to struggling businesses.

The UK's banks missed targets for lending to smal-ler businesses in 2011 by more than £1bn.

Lloyds Banking Group, Royal Bank of Scotland, Santander, Barclays and HSBC – loaned £74.9bn to small and medium-sized ent-erprises in 2011, the British Bankers' Association said.

They had agreed with the Government in the Project Merlin talks to make £76bn of lending available.

However, the banks loan-ed a total £214.9bn to UK businesses, exceeding their target of £190bn. Unveiling today's figures, Nationwide chief executive officer Grah-am Beale said: "Our financ-ial position remains strong."

It comes as a new study revealed most manufacturers do not believe the Government's policies are helping them, with many accusing the coalition of lack of support.