Nationwide to start operation in Ireland

19th August '08

Nationwide, the UK’s largest building society is planning to open a savings operation in Ireland. This will allow them funding from the European Central Bank.

According to Nationwide, this operation will allow them to have funding from outside the UK. This move comes in a way to ease the recent credit crunch and unavailability of funding.

Nationwide cannot currently access ECB funding because it has no eurozone operations. The Bank of England recently set up a special liquidity scheme that allows UK mortgage lenders to swap high-quality mortgages for Treasury bills.

Nationwide usually uses the wholesale markets to finance about 30 per cent of its lending.
But it has been funding new lending from the retail deposits it attracted. It financed all its £8.9bn of net lending last year from £9.1bn of retail deposits in the year ended April 4.

Building societies have reined in their lending to conserve liquidity.

News from - FT.com

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