Tuesday 21 April 2020 5:37 pm

Exclusive: Businesses call for bank-by-bank breakdown of coronavirus lending

British businesses have called on industry body UK Finance to publish a bank-by-bank breakdown of lending through the coronavirus support scheme, as it emerges that Natwest has so far made roughly half of all loans through the programme.

Data from Natwest today showed that as of Sunday evening the group (formerly called RBS) had approved 5,600 loans worth £937m through the coronavirus business interruption loans scheme (CBILS). The programme is designed to provide government-backed lending to companies short of cash.

Read more: Treasury Committee calls on banks to provide daily updates on coronavirus business interruption loan scheme lending

City A.M. understands that Natwest’s lending amounted to roughly half of the volume and value of all CBILS loans by the weekend. 

Although not directly comparable to Natwest’s data, HSBC today said that by Thursday last week it had lent £279m to 2,026 firms through CBILS.

Chancellor Rishi Sunak said yesterday that 12,000 companies had received loans, likely worth more than £2bn. The figure raises questions about how much the 40 or so other banks in the CBILS programme are lending.

Businesses today called for greater transparency around the scheme from banking body UK Finance, which publishes aggregate figures each week. It follows a similar call by the chair of parliament’s influential Treasury Committee last night.

Businesses say transparency ‘is a must’

Mike Cherry, chairman of the Federation of Small Businesses (FSB), said: “Full transparency around CBILS data is a must.”

“Small firms need a bank-by-bank breakdown,” he said. This would “make it far easier for businesses to know which bank to opt for where this scheme is concerned”.

Tej Parikh, chief economist at business leaders’ body the Institute of Directors (IoD), said: “Breaking down the figures by individual bank could provide more insight into what’s holding the system back, and how it can be improved.”

Read more: The Long Read: The coronavirus loan scheme risks failing the people it was designed to help

He added: “It’s crucial that all lenders are stepping up to the mark. Directors could be put off the scheme if they face endless hurdles at the first time of asking.”

A spokesperson from UK Finance said: “As a trade association, UK Finance publishes member data on an aggregate basis.”

Government says CBILS scheme has picked up

The CBILS programme was announced by chancellor Rishi Sunak last month and launched on 23 March. It offers loans of up to £5m to companies with an annual turnover of up to £45m. The government will guarantee 80 per cent of each loan.

Firms have criticised the scheme, however, saying it is too slow to lend to businesses under threat. In response, Sunak has made a number of changes.

The latest figures showed the scheme was picking up markedly. But it still compares unfavourably to other countries’ programmes. The Treasury has faced calls from the Labour party and former Tory chancellors to increase the government guarantee to 100 per cent.

However, Sunak yesterday said he is “not persuaded” by the idea. He added: “When you look at the totality of what we’re doing, it’s more significant in scope and in scale of most of those other countries [offering 100 per cent loan guarantees].” 

The government has won praise from the International Monetary Fund for its response, which includes wage support and business grants.

Sunak said the scheme is growing fast, with 12,000 coronavirus loan approvals. This compares to just 2,000 on 7 April.

Read more: Coronavirus: Billionaire entrepreneur John Caudwell calls on government to extend business support

However, Treasury Committee chair Mel Stride yesterday said UK Finance and the British Business Bank should publish more detailed figures. He said this would help lending increase.

Stride said firms would benefit from a daily update that included the number of enquiries and rejections. “What gets measured tends to get done,” Stride said.

Banks report very high demand

Banks say they are working flat out to lend to firms in need and stress that they too are under pressure from coronavirus.

A Barclays spokesperson today said: “We are processing very significant volumes of CBILS loans and we are confident that we are doing everything we can to get money to businesses as quickly as possible under the scheme.”

Read more: Rishi Sunak ‘not persuaded’ to underwrite 100 per cent of coronavirus loans

A Santander spokesperson said: “The number of CBILS backed facilities we have extended to customers continues to grow following the changes to the scheme since early April.

“We expect the number of approvals to continue to increase in the coming weeks as we work through customers’ applications and the required processes.”