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Banks: Lending

Volume 712: debated on Monday 20 July 2009

Questions

Asked by

To ask Her Majesty's Government whether a maximum loan to value ratio for new mortgages is stipulated in the lending agreements between United Kingdom Financial Investments Ltd and (a) Lloyds Banking Group and (b) the Royal Bank of Scotland; and, if so, what it is. [HL4928]

To ask Her Majesty's Government whether a breakdown by loan to value ratio for new mortgage lending was specified in the lending agreement between United Kingdom Financial Investments Ltd and (a) Lloyds Banking Group and (b) the Royal Bank of Scotland; and, if so, what it is. [HL4929]

To ask Her Majesty's Government under what conditions it would be (a) acceptable and (b) desirable for Lloyds Banking Group or the Royal Bank of Scotland to offer new mortgages with a loan to value ratio in excess of 95 per cent. [HL4930]

To ask Her Majesty's Government in the context of the lending agreements with Lloyds Banking Group and the Royal Bank of Scotland, what criteria are used to ensure that the products offered are competitive; and how United Kingdom Financial Investments Ltd is monitoring this. [HL4931]

To ask Her Majesty's Government in the context of the lending agreements with Lloyds Banking Group and the Royal Bank of Scotland, (a) what criteria are used to measure the banks' compliance with the lending agreements, (b) how often is measurement of compliance with the lending agreements being undertaken, and (c) what the results are of latest assessment of compliance with the lending agreements. [HL4932]

To ask Her Majesty's Government how much was lent in each of the last three years by Lloyds Banking Group in the form of (a) mortgages, and (b) corporate lending; and how that compares with the figures required by the lending agreements between UK Financial Investments Limited and the banks in which Her Majesty's Government hold a share. [HL4951]

To ask Her Majesty's Government how much was lent in each of the last three years by Royal Bank of Scotland in the form of (a) mortgages, and (b) corporate lending and how that compares with the figures required by the lending agreements between UK Financial Investments Limited and the banks in which Her Majesty's Government hold a share. [HL4952]

On 26 February 2009 the Treasury announced agreement in principle with the Royal Bank of Scotland (RBS) to participate in the asset protection scheme (APS). Agreement in principle with Lloyds Banking Group (LBG) was reached on 7 March. As part of their participation in the APS, RBS and LBG agreed specific and legally binding additional lending commitments with HM Government commencing on 1 March.

RBS's total lending commitments are £25 billion- £9 billion of mortgage lending and £16 billion of business lending over the next 12 months.

LBG's total lending commitments are £14 billion- £3 billion of mortgage lending and £11 billion of business lending over the next 12 months.

Redacted versions of each bank's lending agreement deed poll were published on the HM Treasury website on 15 July in response to a request under the Freedom of Information Act.

HM Treasury is monitoring the performance of RBS and LBG against the lending commitments and will report on progress to Parliament on an annual basis.