Santander leaves government lending target negotiations

17 January 2011

Santander has pulled out of talks between banks and the British government over setting targets for lending to consumers.

The UK unit of the Spanish bank is believed to have now left Project Merlin, an initiative set up for the five major institutions in the UK through which they can conduct negotiations with the government.

Santander’s departure from the talks follows Standard Chartered leaving the group in November of last year.

Barclays is leading the talks with HSBC, Royal Bank of Scotland and Lloyds Banking Group - they are due to conclude by January 23rd.

Santander is reported to have left to concentrate on negotiating directly with the UK’s Treasury over its lending commitments and is hoping to make its own some time this week.

The talks were set up in an attempt by the coalition government to persuade banks to commit to providing £200 billion in commercial lending.

Those financial institutions involved were also being encouraged to contribute £1 billion to British prime minister David Cameron's 'big society' fund.

By Jim Ottewill

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