Britain’s biggest building society Nationwide is looking to raise up to £500m in order to boost its capital.
The Sunday Times reports the mutual could launch the fundraising as early as this summer, depending on market conditions.
The newspaper says although Nationwide is well-capitalised under current measures, it is exposed to new rules from the Bank of England’s financial policy committee which limit the total amount that can be issued as loans.
The rules, known as the “leverage ratio” requirements, do not make distinctions between conservative mortgage loans and an investment bank’s trading book.
Sources have told The Sunday Times Nationwide would raise the funding through instruments known as core capital deferred shares, a type of bond which would be able to share in any future losses absorbed by the building society.
Nationwide may launch a much smaller fundraising to prove there is investor demand ahead of a more significant offerin