An extra £500?million in lending could be available for West Midland businesses as a result of the government’s scheme to insure banks’ toxic assets, a senior Lloyds TSB boss said.
Mark Stokes, Lloyds TSB managing director, large corporate, said it was likely the bank would lend an additional £500?million to the mid-corporate market in the region in addition to its existing lending budgets for the year.
The announcement comes after Lloyds Banking Group last month said it intended to participate in the asset protection scheme put forward earlier this year as part of the government’s plan to restore confidence in the financial system and get banks lending again.
But with regard to growing speculation that Lloyds is part of a consortium that will provide lending to Jaguar Land Rover, Mr Stokes said he was unaware of any plan for the bank to step in to lend to the stricken automotive giant.
Looking at the wider market, Mr Stokes said he had seen evidence that businesses were coming to terms with how they operate in a recession.
He said: “They have been very focused on that in the last three to six months. A lot of businesses have got their heads around what they need to do to survive in today’s economy and they are managing. They now want to look to the future.
“Nationally most of our activity is around how businesses manage in a recession environment. We are still seeing companies manage their business for cash which does mean cutting costs. It’s very much a hard trading environment.”
Lloyds TSB regional managing director, large corporate, for the Midlands and the South West, David Richardson, said it was a similar situation in the West Midlands.
“We are talking to local business and their forward order books are nothing like they were 12 months ago,” he said.
But he pointed to a change of focus in the last few weeks where businesses had shifted towards thinking about opportunities when the economy recovers.
He said: “The last three months of last year were really difficult.
“People went on holiday and found the world had changed when they came back – September to February were really hard.
“But in the last four to six weeks we have been seeing more businesses talking about the opportunities when they come out of the other side.
“We have got one or two businesses trying to put funding in place for opportunities when they come out. That’s certainly a shift in the market.”
Mr Stokes said the merger between Lloyds TSB and Halifax Bank of Scotland was continuing with a view to bringing both banks together “in the medium term”.
The integration process has started in the West Midland region and there were already situations where customers were being referred between the two banks.
“Clearly we are still two banks,” said Mr Stokes. “The first part is understanding each other’s bank and that is the process we are going through at the moment.”