Same old story

A series of bumper profits announced by UK banks has once again brought their lending polices to businesses into the spotlight.

News that six UK banks are to form a taskforce to help increase lending to businesses will be greeted with little enthusiasm by business owners up and down the land.

For while HSBC announced profits of £7bn, Lloyds £1.6bn and Barclays £4bn small firms still feel that they are being restricted credit and given pitiful interest on the money that they do have.

And figures out last week back up their arguments. Date released by the British Bankers Association (BBA) showed that the amount lent to SMEs halved since the recession took hold.

Data from the BBA has revealed that average monthly loans to small firms declined by nearly 50% since 2008 from £991m to £564m in 2010.

"I think it particularly galling when you put the profit these banks are posting next to the kinds of sums of money our members are seeking," commented Phil McCabe, a spokesman for Forum of Private Business.

This is a subject that shows no sign of abating and one in which the government must take firm action. Both Chancellor George Osborne and Business Secretary Vince Cable have been making the right noises about this issue recently: but talking and actually doing something are light-years apart.

The government has power over Lloyds and the Royal Bank of Scotland due to the bailout when every taxpayer in the country became an involuntary shareholder. Perhaps now is the time for the shareholders to start having a larger influence on how the institutions are run.





Post Date: August 9th, 2010