The Bank of England’s fund for lending scheme figures reveal Barclays lent by far the most, followed by Lloyds and Nationwide
If Bank of England governor Sir Mervyn King is right in his assertion that the strongest banks are the ones still lending, then a look at the Bank’s own figures on its funding for lending scheme shows which are the weakest and which the strongest banks.
Of those that have tapped the scheme, Barclays is by far the biggest, taking £6bn of the total £13.8bn that was drawn by the end of December. Next biggest is bailed out Lloyds Banking Group at £3bn, followed by Nationwide at £2bn, Santander with £1bn and bailed out Royal Bank of Scotland at £750m. Virgin Money, owner of Northern Rock, has taken £500m.
HSBC has not bothered applying – a clear indication that it is very comfortable with its capital – and it has been one of the key net lenders in the mortgage market over the past year.
So what do these figures tell you?
First, any conclusion that Barclays must be a bit desperate to need to draw down £6bn is probably wrong – the Bank of England figures also show Barclays was a huge net lender to households and businesses, handing out a net £5.7bn. Nationwide was similar, drawing down £2bn from the scheme but extending £3.6bn in new borrowing.
But the picture at the other banks is very different. Lloyds, which drew £3bn from the FLS over the same period, actually reduced its total lending by £5.6bn, while Santander cuts its loan book by an extraordinary £6.3bn. RBS is sucking money out of the economy too. If King is correct, those are the weaker ones.