Lloyds secures 1bn in loan guarantees
LLOYDS Banking Group has reached an agreement with the government to access £1bn of its working capital scheme.
The bank, which has taken advantage of the scheme once already this year, will receive a government guarantee on half of the risk relating to a £2.2bn portfolio of short-term corporate loans.
Lloyds and Royal Bank of Scotland agreed a deal earlier this year on a combined £1bn portfolio.
The government’s working capital scheme, which is overseen by Lord Mandelson’s Department of Business, Innovation and Skills, has come in for heavy criticism due to its unpopularity among banks, who have yet to use anywhere near the £10bn in guarantees on offer.
Analysts have speculated that the fees charged to use the scheme are prohibitively high, although the government has never disclosed how much banks pay for the service.