BBA To Fight Critics With Lending Pledge

The British Bankers' Association (BBA) will today attempt to counter critics' argument that its members have done too little to promote business lending with an initiative designed to appease Vince Cable.

Sky News understands that the bankers' lobby group will announce at its annual dinner in the City that it will begin publishing postcode lending information for small and medium-sized companies (SMEs), showing data for up to 120 areas across the country for the first time.

The initiative has been among the demands tabled by Mr Cable, the Business Secretary, as part of his drive to ensure the major banks do more to lead the economic recovery.

The BBA has been stung by accusations that it has done too little to assist the policy agenda in Whitehall in relation to promoting bank lending, and found itself discredited because of its role sponsoring the scandal-hit Libor benchmarks.

The postcode lending data project is likely to take place through the Better Business Finance Taskforce, a vehicle set up in the aftermath of the financial crisis.

However, critics are likely to argue that the initiative will do little to address the root causes of continuing declines in SME lending. Across the industry, borrowing by such companies fell by 4% last year.

"In difficult economic times many businesses have chosen to pay down debts rather than take out new loans," the BBA said recently.

Last week, Stephen Hester, the outgoing chief executive of Royal Bank of Scotland (LSE: RBS.L - news) , was accused of "butchering" one SME by its founder at an event hosted by the Institute of Directors.

The BBA could not be reached for comment.