UK banks refuse £30b of loans to small busi­nesses

The Pak Banker - - Company & Boss News -

LONDON: Tax­payer-sup­ported high street banks are re­fus­ing to lend to small busi­nesses even al­though they are hold­ing bil­lions in­tended for SME loans in re­serve.

Ac­cord­ing to a re­port by the govern­ment's Na­tional Au­dit Of­fice, high street banks are cru­elly let­ting down their small busi­ness cus­tomers who request loans. As calls are grow­ing for a bonus ban at all tax­payer-sup­ported banks, the re­port is ac­cus­ing banks of re­fus­ing a £30 bil­lion life­line to SMEs. The same banks have stated their de­ter­mi­na­tion to award more than £7 bil­lion in bonus pay­ments to se­nior traders within the next few weeks, an­ger­ing the govern­ment and their SME cus­tomers. The Lib-Dem Trea­sury spokesman, Lord Oak­shotte, be­lieves the UK should copy Ire­land by block­ing all bonuses at in­sti­tu­tions such as the Royal Bank of Scot­land and Lloyds TSB.

Ac­cord­ing to his lord­ship, the Ir­ish model is the cor­rect way to deal with the sit­u­a­tion as the af­fected banks are now a na­tional in­sti­tu­tion and should recog­nise their re­spon­si­bil­i­ties as such. He added, 'if the bonus cheques are writ­ten, I won't sign them off'. The re­port ex­am­ines the fi­nan­cial help given to RBS and Lloyds TSB. , com­par­ing it with the two banks' lack of lend­ing to their SME cus­tomers. The NAO has warned there is a short­fall of around £30 bil­lion be­tween the amount of the govern­ment-set lend­ing tar­gets and the amount of money ac­tu­ally re­leased to small busi­nesses. Lloyds TSB was ex­pected to ac­cede to a tar­get of £11 bil­lion in small busi­ness loans, with its ac­tual fig­ures stalled at £3 bil­lion. RBS was meant to loan £16 bil­lion, with its true fig­ure at an as­ton­ish­ing mi­nus £6.2b. The dev­as­tat­ing ef­fect on both banks' SME cus­tomers is be­com­ing ev­i­dent, with many strug­gling or clos­ing down. -PB News

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