Merlin targets 'to deal with low loan volumes'

The scheme appears to be working when it comes to lending targets.

More loans are being granted thanks to the work carried out in the Project Merlin accord, it is claimed.

An article in today's (June 13th) Financial Times suggests this places the country's biggest banks on target to beat the rates set out in the policy.

Details revealed by a government minister show the overall corporate lending goal could be exceeded by 13 per cent and those with business accounts might be pleased to hear the figure for lending to small and medium enterprises is likely to be met, the news source notes.

The British Bankers' Association pledged its support for those institutions involved in the agreement in May, after it emerged HSBC, Barclays, Lloyds TSB, Santander and Royal Bank of Scotland had advanced £47.3 billion in business banking loans during the first quarter of 2011.

According to the Financial Times article, the numbers agreed in Project Merlin are about ten per cent below the official capacity targets that have been published.

By Kate Guthrie