Small businesses query bank profits in light of lending levels

Lloyds Banking Group recorded £1.6bn profit for the first half of the year today, following HSBC’s posted £7bn gain on Monday.  

While HSBC survived the financial crisis without government support, the 41 per cent taxpayer-owned Lloyds has been forced to meet government lending targets as a condition of its bail-out.

Lloyds reports it has extended to SMEs a total of £4.1bn credit, which is ahead of its government-agreed target.

Phil McCabe, a spokesman for Forum of Private Business, which supports small businesses in the UK, said the amount of lending from banks is still not enough.

‘I think it particularly galling when you put the profit these banks are posting next to the kinds of sums of money our members are seeking,’ he said. ‘In order to be able to meet renewed demand, in order to be able to grow their businesses and therefore act as a catalyst for sustained economy recovery, which of course the government suspects them to be, you’re talking thousands or, at the most, tens of thousands of pounds of funding needed. When you put that next to billions of pounds worth of profit the banks are posting it is particularly galling.’