Banks told to boost lending
WAKEFIELD firms could suffer from a lack of lending despite top banks storming back into profit in the first half of this year.
Chancellor George Osborne warned banks it was their 'economic obligation' to lend after billions of pounds in profits was announced across the sector. He said companies could suffer a lack of working capital when refinancing is needed next year.
Janice Haigh, Yorkshire and Humber Policy Chairman for the Federation of Small Businesses (FSB), said some firms needed cashflow to meet orders which were already in their books.
She said: "The banks say they are lending more but the FSB's take on it is they could be doing more.
"It is small businesses who will get us out of the recession and create jobs, but a lot of the support is patchy.
"What we are talking about is cashflow. Small businesses need loans in order to buy the materials they need to make products."
Barclays announced first half pre-tax profits of 3.9bn, up 40 per cent. HSBC's profits soared by 120 per cent to 7bn, and Lloyds reversed a 4bn loss last year to make a 1.6bn profit.
RBS was due to announce its results today.
The British Bankers Association (BBA) insisted the sector remains committed to supporting firms with a viable business plan. But more stringent lending requirements mean banks have to hold more cash and capital which cannot used to finance lending.
BBA chief executive Angela Knight said: "The industry has set up a taskforce with government to look at how best banks can work to help rebuild the economy. We are writing to the chancellor to set out the next steps in the process and to reaffirm our commitment to our customers, the taxpayer and the recovery of the UK economy."
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Weather for Wakefield
Wednesday 23 May 2012
Today
Sunny spells
Temperature: 12 C to 23 C
Wind Speed: 10 mph
Wind direction: North east
Tomorrow
Cloudy
Temperature: 10 C to 21 C
Wind Speed: 10 mph
Wind direction: North east
