The banks said they had lent just over £100bn to UK businesses in the first half of the year against an annual target of £190bn. But lending to small and medium-sized firms was only £37.4bn, compared with an annual target of £76bn. However, Barclays indicated that the current account balances of UK small business customers have increased by 41 per cent this year.
And as far as SMEs were concerned, Lloyds just beat its small business target, lending them £6.8bn, RBS said that it had lent £15.5bn and HSBC fell short.
Lending is not the only aspect of the Project Merlin agreement to be important in the relationship between the banks and the private sector. Adam Marshall, Director of Policy at the British Chambers of Commerce said:
"Targets only tell part of the story, what is absolutely critical is to see relationships between SME's and lending institutions rebuilt and to see trust and transparency improve,” he said.
John Walker, National Chairman of the Federation of Small Businesses said of the figures:
“... targets do not address the underlying problems in the banking sector, where only a handful of banks control the majority of the market.
With global economic and financial fears, it should not be about meeting targets but about genuinely helping businesses start-up, grow and invest to help to put the UK recovery onto firmer ground.
The FSB is urging the Independent Commission on Banking to be bold in its recommendations to government in September and to ensure that increasing competition in the sector is at the forefront of its report - without this, small firms will continue to get a rough deal.”
For more information, please visit www.milsted-langdon.co.uk
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