Lloyds secures 1bn in loan guarantees

LLOYDS Banking Group has reached an agreement with the government to access &pound;1bn of its working capital scheme.<br /><br />The bank, which has taken advantage of the scheme once already this year, will receive a government guarantee on half of the risk relating to a &pound;2.2bn portfolio of short-term corporate loans.<br /><br />Lloyds and Royal Bank of Scotland agreed a deal earlier this year on a combined &pound;1bn portfolio.<br /><br />The government&rsquo;s working capital scheme, which is overseen by Lord Mandelson&rsquo;s Department of Business, Innovation and Skills, has come in for heavy criticism due to its unpopularity among banks, who have yet to use anywhere near the &pound;10bn in guarantees on offer.<br /><br />Analysts have speculated that the fees charged to use the scheme are prohibitively high, although the government has never disclosed how much banks pay for the service.