Bank bosses to lose bonuses if lending targets are not met
Published 03/12/2009 | 09:59
Bankbosses could see their bonuses axed as part-nationalised lenders fall woefully short of business lending targets, the Treasury has revealed.
Lloyds Banking Group and Royal Bank of Scotland (RBS) are significantly off track on their £27bn commitment to lend to businesses this year, according to the Treasury.
It said it would impose sanctions on the two state-supported banks if they failed to put all efforts into increasing lending — including stripping senior executives of bonuses and docking pay.
RBS, the parent of Ulster Bank, pledged to lend a net £16bn to businesses in the year to February, while Lloyds promised a net £11bn by March, in return for the many billions of pounds received in |taxpayer cash.
While mortgage lending targets have already been smashed at RBS, with Lloyds not far behind, the Treasury revealed for the first time that both are unlikely to hit their annual business commitments.
Lloyds and RBS are struggling to keep pace with business lending as they are being swamped by debt repayments.
While they have lent a combined £50bn so far to businesses, their repayments have soared to £60bn as firms have sought to pay off debts.
“The scale of repayments is so vast on outstanding debts, they haven't been able to keep up with it,” a Treasury spokesman said.