HSBC Holdings Plc (HBC: Quote,HSBA.L) is unlikely to partcipate in a lending scheme envisaged by the UK government to disburse loans to small firms at reduced rates, reports said.
The National Loan Guarantee Scheme is a major component of the credit-easing program that Chancellor of the Exchequer George Osborne announced last year. Its objective is to increase the flow of credit to small and medium businesses by lowering borrowing costs to banks and companies.
Banking giants Barclays Plc, Lloyds Banking Group and Royal Bank of Scotland, along with start-up Aldermore are expected to join the program when it is launched on Tuesday.
The participating banks will have access to cheap funding from the government and the lower costs are to be passed on to customers. However, many major banks already have access to cheap credit from financial markets and Barclays is said to have reservations about the scheme.
It is reported that the scheme will not enable HSBC to lend any cheaper than it is currently doing and the lender still gets a profit on these.
HSBA.L closed on Friday at 580.40 pence, up 5.60 pence or 0.97 percent, on a volume of 49.63 million shares.
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by RTT Staff Writer
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