Lloyds Financial institution is below renewed scrutiny after former purchasers and whistleblowers accused it of failing small companies within the years following the 2008 monetary crash, regardless of receiving a £20 billion taxpayer bailout designed to maintain credit score flowing to SMEs.
A joint investigation by the BBC and Panorama has heard allegations that Lloyds intentionally scaled again lending and wrongly categorised viable companies as “distressed” to recoup funds extra aggressively, doubtlessly hastening their collapse.
A number of enterprise house owners advised the programme that their corporations folded after being positioned into the financial institution’s Enterprise Assist Unit (BSU) – a division that was ostensibly created to assist companies in issue. As a substitute, they declare the BSU supplied little real assist and accelerated the closure of salvageable operations.
James Ducker, a former Lloyds worker who bought monetary merchandise to companies in 2009, stated the financial institution’s inner technique after the crash grew to become clear: “The approach to lending became: do not lend. Beyond that, get as much money back that we’ve lent as possible.”
He described clients referred to the BSU as “easy pickings” for a financial institution seeking to scale back its publicity.
A whistleblower who labored for an exterior consultancy introduced in by Lloyds to advise companies inside the BSU echoed the claims, saying lots of the companies they encountered “probably weren’t distressed, they were salvageable.”
Talking anonymously, the whistleblower accused the financial institution of “planning the administration of these entities in advance of reports that were produced.” They claimed enterprise plans had been ignored and no actual effort was made to save lots of the businesses concerned.
“There was a pattern,” the whistleblower stated. “They weren’t interested in saving the company.”
The accusations strike on the coronary heart of circumstances imposed on banks through the disaster. Then-Prime Minister Gordon Brown had insisted that state-backed lenders should shield entry to credit score for small and medium-sized companies – a important section of the UK economic system.
In a press release, Lloyds Financial institution “categorically denied” the allegations, saying: “These historic allegations have been thoroughly investigated by the group and found to be unsubstantiated. Our Business Support Unit supported many thousands of customers.”
The most recent revelations add to longstanding questions on how some banks handled SMEs within the aftermath of the crash – and whether or not authorities safeguards had been correctly enforced. For Lloyds, which has confronted comparable scrutiny up to now, these claims are prone to reignite requires higher accountability and transparency over its post-crisis conduct.
