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HSBC makes £1bn credit available HSBC makes £1bn credit available
(2 days later)
Banking group HSBC says it is making £1bn ($1.4bn) in extra credit available to support small British businesses.Banking group HSBC says it is making £1bn ($1.4bn) in extra credit available to support small British businesses.
The government has been demanding for weeks that banks resume lending to firms struggling as credit dries up.The government has been demanding for weeks that banks resume lending to firms struggling as credit dries up.
The bank said the money would help "fundamentally sound businesses" with cash-flow problems to "weather short-term shocks caused by the downturn".The bank said the money would help "fundamentally sound businesses" with cash-flow problems to "weather short-term shocks caused by the downturn".
Business Secretary Peter Mandelson welcomed the decision and urged other banks to follow HSBC's example. Meanwhile, the bank said on Monday that it would increase its funding in the mortgage market by a fifth.
HSBC said it had lent £7.8bn for UK mortgages in 2007 and £12.8bn this year. The bank said this figure would rise to £15bn in 2009.
"By some estimates, net mortgage lending in the UK will fall next year, but HSBC has no intention of closing its doors to customers, nor will we compromise our reputation for responsible lending," said Paul Thurston, HSBC's UK managing director.
The pledge comes after former banker Sir James Crosby warned in a report to the government that net new mortgage lending in the UK could fall below zero next year.
'Economies' lifeblood''Economies' lifeblood'
HSBC, which did not take any of the government's bail-out funding, said the money was part of a £3.3bn global working capital fund for small and medium-sized enterprises (SMEs). HSBC, which did not take any of the government's bail-out funding, said on Sunday that the money for businesses was part of a £3.3bn global working capital fund for small and medium-sized enterprises (SMEs).
It said lending would be decided on a "case-by-case basis" using HSBC's normal lending criteria.It said lending would be decided on a "case-by-case basis" using HSBC's normal lending criteria.
Alan Keir, co-head of HSBC's commercial banking, said:"This is new money, new money to support struggling small businesses that bank with us."Alan Keir, co-head of HSBC's commercial banking, said:"This is new money, new money to support struggling small businesses that bank with us."
"We've heard that their critical need is for working capital, so we're responding to that," he said."We've heard that their critical need is for working capital, so we're responding to that," he said.
Michael Geoghegan, HSBC's group chief executive, said: "This is a difficult time for business in many economies. Customers are rightly looking to see how banks can help.Michael Geoghegan, HSBC's group chief executive, 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.""SMEs are the lifeblood of most economies and it is their success that will create economic growth."
Mr 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." Business Secretary Peter 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."