Diamond to meet Merlin lending target

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The Independent Online

Barclays is set to reveal that it has exceeded the lending targets agreed with the Government when it unveils its annual results on Friday.

The bank is expected to say that it made more than £14bn available for small businesses to borrow, plus more than £40bn in total for all businesses. The bank will also say that the key net lending figure, which takes into account repayments, is up despite the overall figure for 2012 showing a fall.

Chief executive Bob Diamond signed up to the target under a bilateral agreement with the Government in February 2011. Similar agreements to make credit available were signed by Lloyds, HSBC, Royal Bank of Scotland and Spain's Banco Santander under what became known as Project Merlin. Collectively the banks agreed to make £190bn available, of which £76bn was supposed to be targeted at small and medium sized enterprises.

Critics have expressed scepticism over the merits of Merlin because it only requires that banks offer the money. The deal takes no account of whether the loans put up for lending is offered on terms that are economical and which small businesses can realistically afford. And the Bank of England has expressed concerns about the net supply of credit to business falling. The Bank is due to publish Merlin lending data for the full year on 13 February.

Barclays is expected to unveil pre-tax profits of £5.5bn to £6bn when it releases its final results. But that is likely to be overshadowed by the debate over the bonuses of top executives, with Mr Diamond potentially in line for a payout of more than £10m.