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 SMEs.
Under Project Merlin, Barclays, HSBC, Lloyds Banking Group, RBS and Santander will increase gross new lending to businesses by 6 per cent, up from £179bn in 2010 to £190bn in 2011.
They have also agreed to increase new lending to SMEs by 15 per cent to £76bn, up from £66bn.
The Government says the Bank of England will track the collective gross new lending of the five banks and will report on their progress quarterly.
Barclays, HSBC, Lloyds Banking Group and RBS have also committed to pro- vide £1bn to the business growth fund being established by the UK business finance taskforce.
Baronworth Investment Services director Colin Jackson says: “If you are a small company and you are finding it tough, which many are, it is nice to think the banks will be there to support you. But the banks will not support a dead duck, firms have to be commercially viable. This is not an open cheque.”
The four banks have agreed to disclose remuneration details of their executive directors and the five highest-paid senior executives on an unnamed basis from 2010. They will also link bonuses to performance and a “significant proportion” will be deferred into shares.
Liberal Democrat Treasury spokesman in the Lords, Lord Oakeshott, has resigned over concerns that Project Merlin does not go far enough to curb bankers’ bonuses.