Bank lending to SMEs falls short of targets in 2011

Lending to businesses by the five major UK banks exceeded targets in 2011, but loans to small- and medium-sized businesses (SMEs) came up short, according to the latest data from the Bank of England (BoE).Gross lending from Barclays, HSBC, Lloyds, Royal Bank of Scotland and Santander totalled £214.9bn in the whole of last year, well ahead of the £190bn target which was set as part of the 'Project Merlin' agreement in February 2011. However, lending to SMEs totalled £74.9bn, below the £76bn target. Nevertheless, this could be due to lack of demand for credit by SMEs. The BoE's Credit Conditions Survey reported last month that demand from small businesses declined in three out of the four quarters of 2011."Lending to small- and medium-sized businesses will be part of the performance metrics of each bank's chief executive and those of the senior managers responsible for business lending," the outline of Project Merlin said back in February.The figures confirmed what the British Bankers' Association had revealed on Friday.BC