Barclays backs SMEs with an extra £1.5 billion

Barclays has outlined a two-pronged plan that it says will enhance its practical support to the UK’s small and medium-sized enterprises (SMEs).

The bank currently has some £15 billion in loans outstanding with SME customers, having increased the balance by 6% over the past year.

It plans to make at least a further £1.5 billion available in 2009 and in addition, is making its CreditFocus service available free of charge to all UK small businesses, whether or not they are Barclays’ customers.

The service is backed by Experian and allows users to credit check and be regularly updated on the credit worthiness of up to five customers or suppliers.

The lender is also working with the Government to develop a Small Business Finance Scheme that will provide individual business loans from £1,000 to £1,000,000.

This will allow customers to benefit from the new European Investment Bank Scheme, which is providing £300 million of funding that can be accessed by banks for loans to SMEs.

According to a report in The Daily Telegraph, Barclays has already become the first UK bank to make use of the scheme, lending £200,000 to a family business that needs to relocate to larger premises.

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A&L research reveals mixed response to saving

Alliance & Leicester (A&L) has been taking a look at the savings habits of Britons during 2008 to discover that one in seven people questioned have not saved anything this year.

Respondents in this category were split equally between those who had regrets about the situation and those who were surprisingly unconcerned.

Meanwhile, one in five Britons were disappointed with their savings balances and almost one in three have had to use their savings to cover rising living costs.

The results suggest that 64% of UK adults have managed to put at least some money away over the year.

Of this group, 20% have been shaken by the current financial climate and want to plan ahead for 2009, by building up a savings pot.

Thirty-three per cent met their savings expectations and 29% saved more than expected.

Twelve per cent managed to save something but ended up spending most of their stashed cash.

A&L’s manager for savings, Hetal Parmar, is surprised at the proportion of people who haven’t put any money aside and are not concerned about this.

He recommends setting up a standing order from a current account to a savings account as an easy way to get into the savings habit, even if the transfer is just for £10 per week.

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Barclays Wealth employee charged with insider trading

A Barclays employee has been charged in the US in connection with a $4.8 million insider trading scam.

Federal prosecutors are alleging that Matthew Devlin of Barclays Wealth made use of information gleaned from his wife, who works for international public relations firm, Brunswick Group.

Four other Barclays Wealth bankers have been charged with conspiracy and securities fraud.

In her role at Brunswick, Mrs Devlin has been involved in at least 12 company mergers, including InBev’s takeover of Anheuser-Busch and Dow Chemical’s acquisition of Rohm & Haas.

Mr Devlin allegedly passed on information about the deals to traders and members of the legal profession, in return for cash and gifts.

At the time of the alleged offences, Mr Devlin was employed by Lehman Brothers and his activities first came to light during an operation to expose insider traders.

When the investment bank collapsed in September, Barclays rapidly acquired its New York investment banking and capital markets businesses.

Mrs Devlin is reported to be an innocent party to the events; according to Brunswick, the information was revealed only because her spouse was in close proximity and able to consider the implications of her travel schedule.

The company says there is no indication that Mr Devlin accessed Brunswick’s confidential systems.

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Barclays’ chief urges banks to apologise

The chief executive of Barclays has stated that banks need to apologise for their part in the credit crisis, if they want to regain the trust of their customers.

John Varley was being interviewed for the BBC’s Panorama programme, to be screened on Monday, when he made the remark and went on to describe the banking sector as facing a public relations crisis.

Mr Varley is also predicting that restricted lending could blight the UK economy and housing market for up to two years more.

He does not expect banks to increase their lending before 2010, during which time both consumers and businesses will struggle to access credit.

The chief executive believes that the overall level of debt in the UK economy needs to fall but that the key to economic recovery rests with asset prices, which are currently volatile.

While the banker sees stabilisation as central to restoring growth, he could only predict that it will occur some time over the course of the next 18 months.

Mr Varley has also spoken out about UK house prices recently.

Last week, he predicted a fall of up to 15% in 2009 and at the same time criticised mortgage lending levels over the past decade.

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Irish government primed for €5bn bank bail out

The Irish government is about to throw a €5 billion lifeline to its three biggest banks, according to reports in the press.

Unnamed sources have informed Dublin’s Sunday Business Post and the Irish edition of The Sunday Times that the troubled Anglo Irish Bank could become 80% state owned.

The two other banks named as in need of urgent assistance are Allied Irish Bank and Bank of Ireland.

According to The Sunday Times, the injection of cash will be accompanied by share issues to existing investors, which the Irish government will underwrite and could therefore increase its level of investment to €7 billion.

Last week, the chairman of Anglo Irish Bank resigned.

Shares in the bank plummeted as it emerged that Sean Fitzpatrick had temporarily transferred loans of €87 million with Anglo Irish Bank to another bank, before the group’s financial year end.

Mr Fitzpatrick claims the loans were made to him on a commercial basis and while the bank is adamant that its chairman did not breach banking or legal regulations, it has admitted he has acted inappropriately.

Similar transfers have apparently occurred over the past eight years, meaning that the loans did not appear in the group’s annual accounts during the period.

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