The UK’s biggest banks have signed an agreement with the Government that
will see £190bn made available in gross new lending to businesses in 2011,
including £76bn to small and medium sized firms.
Under Project Merlin, Barclays, HSBC, Lloyds Banking Group and RBS have
agreed to increase lending to businesses and improve transparency around
loan applications and remuneration. Santander has agreed to the lending expectations.
The five banks have agreed to increase gross new lending to businesses by 6
per cent, up from £179bn delivered in 2010 to £190bn in 2011.
They have also agreed to increase gross new lending to small and medium
sized businesses by 15 per cent to £76bn, up from £66bn in 2010.
Santander has agreed to deliver £6.7bn of gross new lending to businesses this year, £4bn of which will be to SMEs. It represents a 25 per cent increase in SME lending and a 12 per cent increase in total business lending.
The Government says the collective gross new lending of the five banks will
be tracked and the Bank of England will report on their progress quarterly.
Barclays, HSBC, Lloyds Banking Group and RBS have agreed to disclose the
remuneration details of their executive directors and the five highest paid
senior executives on an unnamed basis from 2010.
They have committed to provide further support to UK small and medium sized
businesses through an additional £1bn contribution to the Business Growth
Fund, being established by the UK Business Finance Taskforce.
They will also support the establishment of the Big Society Bank with £200m
worth of funding over two years, commencing in 2011.
The Treasury says: “This will not affect the operational independence of the
Big Society Bank, within its agreed business plan, and is in addition to the
money provided from dormant accounts, the provision of which the banks also