Banks plan to lift UK corporate lending levels, says BoE
Central bank survey reveals possible improvement in business credit conditions
By CFOWorld.co.uk staff | CFO UK | Published 14:40, 03 January 13
UK banks are likely to bring about a significant increase in corporate lending over the first quarter of 2013, according to a Bank of England (BoE) survey published on Thursday.
In its quarterly Credit Conditions Survey, the UK central bank also noted a rise in the supply of corporate credit over the fourth quarter of 2012.
A majority of banking sector respondents said the BoE’s Funding for Lending Scheme (FLS) was among the reasons for the increase in lending. The FLS offers UK operating banks (and building societies) finance at lower rates provided they increase their lending to businesses and/or households.
BoE said last month that UK banks and building societies drew down £4.36 billion via the FLS in its first two months of its operation.
Elsewhere in the survey, BoE noted that spreads on lending to large and medium-sized firms had tightened substantially in the three months to early December. However, they remained more or less unchanged for small enterprises.
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