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HSBC says it is doing its bit to lend support; ECONOMIC DOWNTURN.

HSBC offered a boost to the mortgage market by revealing it planned to increase lending to UK homeowners by a fifth.

The banking giant will lend up to pounds 15bn in mortgages in 2009, 20% more than last year and almost double the level seen in 2007. It said it remained open for business, but insisted it would not compromise lending standards.

HSBC's announcement came amid forecasts that frozen money markets and the slump in the housing market will result in repayments and redemptions outstripping lending next year.

On Saturday the giant bank announced it was making pounds 1bn of extra funding available to support small businesses in Britain.

The move was welcomed by ministers, who have been calling for banks to resume lending to firms.

HSBC, which did not take up the Government's bank bail-out funding, passed on the full benefit of last week's 1% base rate cut to retail and business customers.

It said the extra cash for small business came from a EUR5bn global working capital fund for small and medium-sized enterprises (SMEs) over and above what the bank would normally expect to lend.

Group chief executive Michael Geoghegan said: "This is a difficult time for business in many economies. Customers are rightly looking to see how banks can help.

"SMEs are the lifeblood of most economies and it is their success that will create economic growth."

The Government will hope that the announcement will put pressure on the other major banks to come forward with additional funding for firms.

Business Secretary Lord Mandelson said: "We welcome this support providing additional funds for SMEs and would also urge all banks to maintain charges and rates alongside offering good communications with their small business customers."


PLEAS Alistair Darling wants the banks to resume normal lending.
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Publication:The Journal (Newcastle, England)
Date:Dec 8, 2008
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