Royal Bank of Scotland Group Plc Chief Executive Officer Stephen Hester said he would be “delighted” if the bank lent more to businesses this year than last, though in uncertain times borrowers are choosing to pay off their debts.
“We have the balance sheet, funding and capital to lend, and indeed the future success of RBS requires that we do lend more,” Hester said today in a speech at the British Chambers of Commerce annual conference in London. “Last year under half of available overdraft lending was used by our customers, 5 percent less than the prior year.”
RBS, Lloyds Banking Group Plc, HSBC Holdings Plc, Barclays Plc and Santander U.K. collectively lent 214.9 billion pounds ($336.6 billion) to business under the so-called Project Merlin deal of 2011, beating a target agreed with the government by 13 percent. They lent 74.9 billion pounds to small and medium-sized companies, defined as those with revenue of less than 25 million pounds annually, 98.6 percent of the amount pledged under the Merlin deal. That was a “disappointing” result, U.K. Treasury minister Mark Hoban said in February.
Hester also said Britain must “rebalance” where it makes its money.
There are “specific types of lending where the standards pre-2008 had become too loose and need to be permanently tightened -- most property-related lending is a case in point,” he said. “Too much of Britain’s GDP was tied up in property- related activities, and we need to rebalance to more exporting, manufacturing and services.”
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