Britains Banks miss lending targets

Banks promised to lend £19bn in the first quarter this year ( in the Merlin Agreement) but only managed £16.8bn; given we are now late May i would be suprised if they both catch up and stay on target for the rest of the year. Pipeline is the key here and we see deals still very hard to get through the banks underwriting process.

Some 3 years on after the credit crunch started we still cannot tell whether a specific case will be agreed or not- obviosuly some are clear yes/no decisions but for many there is a real lack of specifics. This is unforgivable. Worse – I suspect some of the lending claimed is just the repayment of overdrafts and the opening of a new loan which counts as new lending – so I would live to see the figures actual new to bank debt. I sense that would be far lower.

I cannot see how the banks can get back on track- where is any demand coming from? We see lots of enquries/daily/weekly /monthly- the difficulty is matching the clients needs to the lenders appetite.  Any credit blemish- for whatever reason knocks millions out of any possibility of modestly priced finance. Any loss over the last 3 years- however so caused- has the same result; The banks will not lend on start ups ( too risks/no track record etc) and no projection led business; eg you will find it hard to get a bank to back a modestly successful busienss- say a restaurant looking to double its covers- too risky- sector under pressure and no desire to take a chance on new business being achieved.

New lenders have come to the market and this helps- but in loan terms- the newer players are minute compared to the big banks.

We need more competition and more appetite from the lenders- why isn’t the FSA  granting any new licences ? I think Lenders can make money and don’t need huge balance sheets to do so.

I hope for the best but …i remain inconvinced british business can attract the credit support they need.