13 Oct

Building society announces capital booster fund

Building society announces capital booster fund

Nationwide building society, one of Britain's biggest mortgage lenders, has said it will seek to raise more capital.

Although it is not in trouble and does not need to dip into the government capitalisation fund in the way the Royal Bank of Scotland, Lloyds TSB and HBOS have done, the lender said it would nonetheless seek £500 million in extra capital from the fund to bolster its position.

Such a move could help the lender increase the availability of its mortgages.

Following decisions by eurozone governments to follow the UK example and take stakes in their banks after a meeting attended by Gordon Brown at the weekend, the prime minister expressed optimism that the liquidity situation will soon pick up both in Britain and elsewhere.

He said: "I believe that in the next few days confidence in the banking system will be restored."

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