HSBC Creates $5 Billion Fund to Boost Credit Access (Update1)
Dec. 7 (Bloomberg) -- HSBC Holdings Plc, Europe’s largest bank, created a $5 billion fund to increase access to credit for small and medium-sized businesses.
One billion pounds ($1.5 billion) from the new fund has been allocated to U.K. customers, London-based HSBC said in an e-mailed statement. HSBC will provide the capital from its own resources, it said.
The seizure in credit markets has pushed Britain into its first recession since 1991, prompting a 50 billion-pound bank rescue package from the government. Creating the new fund will help businesses weather the short-term shocks caused by the downturn, HSBC said today.
Small and medium-sized businesses “are the lifeblood of most economies and it is their success that will create growth,” HSBC Chief Executive Officer Michael Geoghegan said in the statement.
The bank is allocating about HK$4 billion ($520 million) to Hong Kong businesses. HSBC’s loans to small and medium-sized companies in Hong Kong have grown over the past two months as rival banks curb lending, Global Co-Head of Commercial Banking Margaret Leungtold reporters in Hong Kong today.
The key rate in the U.K. at 2 percent is now at its lowest since Winston Churchill was prime minister in 1951. Next year, Britain’s economy may shrink 1.3 percent, the most in the Group of Seven nations, according to the International Monetary Fund.
HSBC had assets of $2.6 trillion at June 30 this year.
To contact the reporter on this story: Rebecca Keenan in Melbourne at[email protected]
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The world's local bank is trying to prove to the global communities that they care and support local businesses. What impact will $5b make when they allocate the fund across the global communities? It is a good publicity move.