World’s Local Bank Pledges £8bn to UK SMEs

The UK economy is maintaining its recovery, albeit tentative. The impetus carried forward from the coalition looks certain to build under the new, outright Tory government. That HSBC has pledged £8bn in loans and waived fees to small/medium UK enterprise won’t go unnoticed in Number 10.

It’s a far cry from last year when the CMA had to take HSBC to task over bundling. That is, if someone wanted to open a business bank account, the bank insisted on them opening a current account, too.

Whether that was something that got lost in translation, who knows. But that type of practise has been outlawed in the UK for over a decade.

Today, HSBC were the cause of charged glasses, not fines, as they announced plans for their £8bn deal for UK SMEs.

The spread of the wealth

Reading between the lines, as is often this commentators wont, could HSBC be betting on HS2 coming to fruition sooner rather than later?

Or could the fact that both Manchester and Birmingham, each in line for £400M of the pot (the biggest single share), have their own integrated transport systems have swayed the choice of fund distribution?

Manchester’s transport system is much celebrated. And, if you’ve been to Birmingham recently, you’ll know the city centre has been a construction site for the last three years.

First, there was the much overdue development of New Street Station. More recently, we’ve seen the extension of the Black Country Metro right up to New Street’s front door.

The £800M pledged for UK’s second and third cities represents 10% of the whole HSBC lending fund. Given that 43 areas across the UK are pegged to benefit, that’s a huge slice of the pie for just two cities.

Is a Tory government the green light for transport development?

In The Guardian’s year-long transport project, Manchester’s integrated system has been the source of much debate. Its model was used unwittingly as a proposed template for the rest of the country.

At the time, thoughts were tabled that privatisation could help replicate integrated transport across the UK.

With the Conservative government now in the driving seat, their history of privatisation could well have been the green light for HSBC to appropriate such huge slices of the pie outside London.

Factor HS2 into the equation to join the Capital to the Midlands and Lancashire? The streets once paved with gold with blaze a trail through the heart of England. No saddles here, though, unless you count Walsall as en route.

Downsides?

There is one small dark cloud on the horizon. Despite HSBC being centred in London, the bank’s chairman, Douglas Flint, has already warned the government that continued convoluted legislation could see HSBC up sticks.

It would make the distribution of the fund a degree harder to manage. But with 50,000 staff in the UK (prior to any move), HSBC has the resources.

Is the £8bn a sweetener for the Conservatives? Or is the appropriation of funds outside London another shot across the government’s bows?

Either way, with a circa 85% business loan approval rate and £8bn up for grabs, HSBC will attract many new business bank accounts…

…with or without the accompanying personal account. 😉

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