Barclays fight back against industry slander
25 February 2011
Barclays featured heavily in last week's press for all the wrong reasons. The bank was accused of, among other things, hypocrisy.
The Times revealed that the Bank had decided to limit funding to SME's in the very same week that it had signed up for Project Merlin and told the nation that it would do its best to support smaller businesses in the economy.
Lenders and consumers alike raised concerns over the alleged decision.
George Ashworth, Head of Asset Finance, at Aldermore, said: "If correct, this news will be a bitter blow to the many thousands of SMEs who have been loyal Barclays customers for many years."
However, Barclays explained that the media had got at least some of their facts wrong.
In response to the slander, Alex Brown, Managing Director and Global Head of Asset Finance, Barclays Corporate, said: "Barclays Corporate is open for business and is fully committed to helping the UK economy; including playing our part in the Project Merlin announcement made by the major UK banks last week.
We're acutely aware of our responsibility and we are taking steps to restore confidence.
Although Barclays Business discontinued asset finance products for SME customers last year, the withdrawal of one product from the market cannot be viewed as depriving businesses access to credit when there are many other suitable alternatives available. In fact, half of unsecured lending to SMEs is for the purpose of purchasing an asset and Barclays Business offers a number of alternative options to help them do this including term loans, overdrafts and EFG.
However, Barclays Corporate continues to provide asset finance to clients as part of a broad-based suite of products designed to meet their specific needs.
Restoring confidence is essential; in that vein, our approval rates in the corporate bank continue to be above 90 percent, a level consistent with the years before the financial crisis. This demonstrates that we are standing by clients through difficult times and are committed to lending to viable businesses with credible business plans, capable management and proven track records. However, the backdrop is one of client caution (continuing to deleverage, improve their working capital and hold cash reserves).
In 2009 Barclays made £35 billion of new loans. In 2010, we passed that mark by October and by the end of the year we had lent £36 billion to businesses and households - clear evidence of our commitment to private sector led economic growth.
We want to lend; lending is what we do. It is our obligation to lend responsibly to businesses and help them grow. In order for us to fulfil our commitment, we need businesses to feel confident that they can come to us to ask for credit, which in turn will help get the UK economy back on track."
By Katie-Jill Rowland