Lloyds Accused Of Immoral Profits
18th December 2017.
Britain’s biggest mortgage lender Lloyds has been accused of “immoral” behaviour for using billions of pounds of cheap central bank funding to boost profits.
The high street bank has taken advantage of a £140 billion Bank of England fund launched after the Brexit vote to boost the supply of cheap funding to the real economy.
Lloyds has to-date borrowed £20 billion from the Term Funding Scheme (TFS).
What has incised most criticism, however, has been the decision by Lloyds to cut back on its own lending to consumers and businesses. Unlike its rivals, the bank has lent a mere £5.5 billion since the scheme launched in August 2016.
Lloyds has subsequently cumulated £6.3 billion in pre-tax profits, with analysts noting these have been “enhanced” by use of the TFS funds.
Ian Cass, of the Forum of Private Business, called it “immoral” for Lloyds to take billions of pounds of central bank support and not increase lending.
Ian Gordon, analyst at Investec, defended Lloyds and noted how the scheme was initially designed to handle negative impacts of the rate cut.
A large factor in the reduced lending over recent months was the result of the bank approving fewer mortgages in the wake of the Brexit vote.
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