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Part-nationalised banks Royal Bank of Scotland and Lloyds Banking Group have been criticised by MPs for not lending enough to homeowners and businesses.
The Committee of Public Accounts today issued a report in which it said that both banks were likely to fail to meet a legally binding lending target of £39 billion by the end of February. The commitment, which now looks like being flouted, was the price the banks had to pay for receiving the government bailouts which saved them from ruin during the financial crisis of 2008.
In its report the committee said, “Lending to business, vital to the recovery of the economy, is falling short of legally-binding commitments entered into by two of the banks that received the most support: the Royal Bank of Scotland (RBS) and Lloyds Banking Group.”
The National Audit Office recently issued a report in which it said that the British taxpayer had forked out £850 billion to keep the banks afloat.
In return for this RBS promised to lend £25 billion for mortgages and businesses while Lloyds is committed to £14 billion. The British government owns an 84 per cent stake of RBS and a smaller stake of 43 per cent in Lloyds.
A Lloyds spokesman told the BBC that it was “unlikely” that the targets would be met.
Shares in British banks rose on the FTSE 100 in morning trading following positive news on the Greek debt crisis.
Unite, the union, has gone to international unions, in its attempts to bring the...
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