HSBC Boosts SME Lending With £5bn Fund

HSBC, the only major UK bank not participating in the British government's Funding for Lending programme, boosted financial support for small to medium enterprises looking to expand through international trade after setting aside a multi-billion pound fund.

According to a statement on its website, the bank revealed it is making £5bn (€5.7bn / $7.4bn) available to businesses with a turnover of up to £25m in 2013.

"Trading internationally is critical not only for the British companies who want to remain competitive in the future, but also for the wider UK economy," says Jacques-Emmanuel Blanchet, Head of UK Commercial Banking at HSBC in the statement.

HSBC's SME lending in 2012 grew 3 percent to £12.3bn from the previous year. The bank said is appoved 80 percent of its small business loan applications.

HSBC also said it increased its UK mortgage lending in 2012 by 20 percent to £19.5bn over the same period. Within this total, lending to first time buyers increased 32 percent.

While HSBC increased its lending to SMEs, Britain's biggest banks decreased their net lending into the UK economy, since the launch of the Bank of England's (BoE) key FLS programme in August.

According to the UK's central bank data published on its website on 4 March, banks drew around £13.8bn from the joint BoE/UK Treasury scheme since its launch in August, while at the same time decreasing their net lending by and overall $1.5bn.

A total of £9.5bn was drawn in the final three months of last year while overall lending fell £2.5bn, the bank said.

HSBC's financial support of UK businesses, looking to expand overseas, ties in with its report in February this year that growth in UK exports will be supported by emerging market demand over the next two years as Europe, Britain's main export market, continues to struggle.

In HSBC's Global Connections Report, UK merchandise exports to Asia are expected to expand by 9 percent annually between 2013 to 2015, more than double the average annual growth forecast for exports to Europe.