The Financial Times reported that UK banks will beat lending targets to large, small and medium-sized businesses as set under the terms of Project Merlin in February. While the exact details are likely to remain unknown for some time yet, the FT refers to figures announced last week by Mark Frisk, minister for business and enterprise, that lending in Q1 was £17.2bn, against an annual target of £76bn.
Frisk added that they are expected to beat overall corporate lending by 13% and “all but hit” targets for lending to SMEs.
So they good they ran it twice
The City should be positively bouncing after reports of employment figures for trading, derivatives, commodities and private equity positions in UK banks show them to still be on the increase. According to City AM, the rate of growth was up 10% on January’s figures compared to 30% the previous quarter.
It also reported the number of new equities positions jumped 150% over the year – in fact, the paper was so impressed with the fact it published the story twice!
Unfortunately, this good news is far outweighed by the amount of negative news elsewhere, with the Royal Wedding being blamed for the slump in UK manufacturing’s biggest monthly drop for two-and-a-half-years. The drop was also compared to a similar drop in the month of the Queen’s Golden Jubilee, with June 2002’s figure falling by 5.4%.
Straight line move
Is it something peculiarly British that means we can take a glorious occasion and then blame it for an economic downturn?
Elsewhere, there is coverage of Chinese bank lending falling while their export growth slows; neighbouring Japan’s recent economic uplift seems to have hit the buffers (the tsunami to blame this time); US exports are falling.
Thankfully, there are enough sensible investors who follow the sentiment of Royal London Asset Management’s economist, Ian Kernohan, who says: “Economies don’t move in straight lines. If they did, then they would be much easier to forecast, so some volatility in the pattern of economic recovery is to be expected.”
Using the same logic, the good news for bankers will hardly proceed unhindered either. They will be asked to work harder for longer to help repair the economy as well as their reputational damage – even if it just to the point where even Fred Goodwin is happy to describe himself as a banker once more.
