HSBC increases lending despite rejecting government support

Tim Wallace
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HSBC raised lending to small firms over the last nine months, and yesterday announced another round of targets on SME credit, arguing that it can do its bit to help the economy without needing support from the government.

Rival banks including Barclays, RBS and Lloyds have all cut interest rates to businesses and households in recent months, as they can access cheap cash from the government’s funding for lending scheme (FLS).

But HSBC yesterday revealed it had made loans worth £4bn to small exporters so far this year, and intends to make at least another £1bn in the final quarter, despite turning down the offer of state aid.

The banking giant has provided gross new lending of £6.3bn to SMEs in the last nine months, an increase of eight per cent on the year.

It insists it has such a strong depositor base that it can fund itself cheaply without government help, in contrast with its rivals which have happily signed up to access the cheaper funding.

HSBC also argued that focusing lending on firms with an international outlook helps the bank, predicting accelerating growth in trade and GDP from 2014.

“In the future trading internationally will be critical, not only for the many British companies who want to remain competitive, but also for the wider UK economy,” said HSBC’s Jacques-Emmanuel Blanchet.