Banks To Make Business Lending Boost Pledge

Tue, 08 Feb 2011

British banks are set to pledge to increase the level of finance available to UK businesses by around 10 per cent this year, following months of negotiations with the government over business lending commitments.

According to reports, the country’s main banks - Barclays, HSBC, Lloyds, Royal Bank of Scotland and Santander - are understood to have agreed to lend a total of £190bn over the next 12 months year.

Lloyds and RBS are believed to have each made business loan commitments of between £55bn and £60bn, while both Barclays and HSBC are expected to make around £30bn available to UK firms. The remaining amount will be made up by Santander .

Under the terms of the ‘Project Merlin’ agreement, the banks will also offer £1.3bn over three years to small businesses in areas of the country worst hit by the spending cuts, such as the North East of England and Yorkshire.

The long-awaited deal between ministers and bank officials is expected to be announced before the British-listed banks begin reporting their results next week.
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