After reporting a massive 44 per cent jump in profits to 3.59bn last week, it’s disheartening, to say the least, to hear that Barclays is refusing to comply with the proposed Government scheme that set targets for UK bank lending to small businesses.
Unlike the Royal Bank of Scotland and Lloyds Banking Group, Barclays does not have to commit to the proposed business lending targets.
Steve Cooper, the bank’s head of small business division, told the Financial Times “I’m not going to sign up to a target. I don’t want to create an expectation that if Barclays said no on Thursday it could say yes on Friday because it has a target to achieve.”
This stance is simply indefensible, and one that is bound to incur the wrath of the government on the sector over its intransigence to commit to easing the liquidity of small to medium businesses, the lifeblood of the economy.
The recent travails of banks are hardly the fault of small business, and to infer that that overzealous lending to British enterprise was in some way responsible for their near collapse is a pathetic call.
Calls for banks to increase their business lending are also coming from business pressure groups. The British Chambers of Commerce have recently expressed their concern at the continued difficulties that businesses have in obtaining bank loans. The Federation of Small Business (FSB) is calling for the banks outside the ‘big four’, i.e. Nationwide and Santander, to become more involved in the business lending market.
According to the British Bankers Association, around £600 million was lent to small business in June this year, down from £1bn in June last year. The drop is due to banks wanting to strengthen their capital rather than a wane in demand for loans from businesses.
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