HSBC withdraws from UK pandemic loan collection plan
By Iain Withers
LONDON (Reuters) – HSBC withdrew from an industry-wide plan to collect unpaid COVID-19 emergency business loans, in a blow to efforts of other banks to team up to limit any damage to reputation if companies that have difficulty repaying are treated unfairly.
Reuters reported in December that only 10 of the 23 lenders who had made ‘rebound’ loans (BBLs) had joined the agency at the time, with most of the smaller ones opting out, believing they did not. not good value for money.
HSBC this week told industry body UK Finance, which is setting up the central body, that it would not join, a source with knowledge of the matter told Reuters after a decision by senior HSBC executives these last few weeks.
Big banks have worked hard for months to put in place a coordinated system for collecting unpaid BBLs, once the £ 45 billion ($ 62 billion) of state-guaranteed funds given to small businesses with checks limited will be refunded from May.
Lenders including NatWest and Lloyds have argued for a cohesive approach to help deal with defaults and avoid a repeat of past abuse scandals that have caused profound damage to reputation and mistrust afterwards. the financial crisis.
The source said HSBC decided to set up its own system because it wanted to closely manage business and reputation risks internally rather than outsourcing the work entirely.
The bank had not ruled out joining at a later stage, but it was highly unlikely to do so before launch, the source said.
“We always strive to ensure fair and consistent results for our clients and we will adhere to the principles set out by HMT by developing our own collection process. We remain in dialogue with UK Finance, BBB, HMT and other lenders,” said a spokesperson for HSBC UK. noted.
UK Finance was not immediately available for comment.
(Reporting by Iain Withers; Editing by Alexander Smith)