BOE Says Merlin Banks Lent GBP 57.4 Billion In Third Quarter
fxbom.com
07:19 PM
LONDON -(Dow Jones)- Five of the U.K.’s biggest banks lent GBP57.4 billion to U.K. businesses in the third quarter of 2011, according to Bank of England data published Monday, putting them on track to meet lending targets agreed with the government.
HSBC Holdings PLC (HSBA.LN), Barclays PLC (BARC.LN), Royal Bank of Scotland Group PLC (RBS.LN), Lloyds Banking Group PLC (LLOY.LN) and the U.K. arm of Spain’s Banco Santander S.A. (SAN.MC) lent a gross GBP57.4 billion to firms in the three months to the end of September, including GBP18.8 billion to small businesses.
Under a deal called Project Merlin, the five banks agreed to provide new loans of GBP190 billion to firms this year, of which GBP76 billion was earmarked for small and mid-size firms. BOE data shows banks have lent a cumulative GBP157.7 billion over the nine months to September, of which GBP56.1 billion went to small companies.
The official BOE data tallies with estimates produced by the British Bankers’ Association, which represents lenders. The BBA said Nov. 9 although the five banks are meeting their lending targets demand for loans remains subdued.
However, lenders have warned the BOE that the supply of credit to the U.K. economy could suffer if conditions in bank funding markets don’t improve. The cost of wholesale funding for banks has increased in recent months because of investor nervousness about lenders’ holdings of euro-zone government debt.
Chancellor of the Exchequer George Osborne is scheduled to announce plans to further improve the supply of credit to small and mid-size firms later this month.
-By Jason Douglas and Ainsley Thomson, Dow Jones Newswires, 44 20 7842 9272;
jason.douglas@dowjones.com
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