HSBC HSBC Holdings PLC

By Adam Clark

HSBC Holdings PLC (HSBA.LN) has increased its annual funding pot for small U.K. businesses to 12 billion pounds ($15.8 billion), as British banks seek to stave off competitive and political pressure over lending to domestic companies.

HSBC, the largest bank in Europe by total assets, said Wednesday it has raised the amount by GBP2 billion from 2017's fund, which was fully utilized by British businesses. The latest amount is double the size of the first fund, launched in 2014.

The bank also said the new fund has ring-fenced GBP1 billion to help U.K. companies expand their business overseas. HSBC said its research found 72% of U.K. businesses expect their cross-border trade to increase this year.

"After the success of last year, this increased SME Fund 2018 will help more businesses plug the gap between ambition and reality, supporting their growth. We are committed to help British businesses innovate, evolve and grow," said Amanda Murphy, head of commercial banking at HSBC U.K.

The fund's expansion was endorsed in a statement by the U.K. minister for small business, with British banks under pressure to show support for domestic businesses.

A parliamentary committee said in February that it would launch a new inquiry into the state of the market for small-business finance following a scandal over Royal Bank of Scotland Group PLC's (RBS.LN) alleged mistreatment of distressed commercial customers in the wake of the financial crisis.

At the same time, challenger banks and financial-technology companies have stepped up competition for business lending. On Tuesday, peer-to-peer lender Funding Circle priced its upcoming London listing, as it seeks to build on the more-than GBP5 billion it has lent to small businesses since 2010. Meanwhile, a number of smaller lenders are set to compete for GBP775 million in competition funds being provided by RBS for business banking.

Write to Adam Clark at adam.clark@dowjones.com; @AdamDowJones

(END) Dow Jones Newswires

September 19, 2018 06:17 ET (10:17 GMT)

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