Project Merlin is a deal launched between Chancellor George Osborne and the major banks to increase lending to businesses
Banking giant HSBC has publically revealed the lending commitments it made under the Project Merlin agreement.
The bank said it was on track to lend £44.1bn – its own share of the £190bn total – to businesses this year, as agreed under the Project Merlin
It also took the opportunity to clear up confusion surrounding ‘targets’ agreed with the Government and ‘capacity,’ which refers to availability of business credit above the target thresholds.
The £44.1bn was agreed as the bank’s ‘capacity’ lending figure, on top of a target of £38.3bn. By July HSBC had lent £22.7bn to businesses, a mix of loans and overdrafts. This figure includes £5.6bn to small businesses, a significant proportion of the £11.7bn target.
Joe Garner, head of HSBC
UK retail banking, said: “There is capacity for additional facilities of at least £1.2bn [to small businesses].”
Garner published the lending data ahead of an August 12 Bank of England
update on Project Merlin, and now expects the other banks in the agreement to reveal their own data.
He also pointed out HSBC’s improved share of the mortgage market. The bank has taken an 11 percent share of new mortgage lending in the first half of 2011, compared with 2.5 percent before the recession hit in 2008.
Garner added: "Despite the ongoing challenging UK economic conditions, in the first half of 2011 HSBC used its unique international strength to pump over £30bn into the British economy. As well as lending record amounts to UK homeowners, we are also helping nearly 44,000 UK business customers trade internationally."
HSBC recently announced it would cut 30,000 jobs by 2013 – and exit operations in 20 countries as – in an effort to save billions of dollars and boost profits. The announcement came on the back of pre-tax profits of £7bn, a 3 percent year-on-year rise, in the first six months of 2011.