Exclusive-UK rips up state guarantees on nearly 1 billion pounds of COVID loans

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The UK government has scrapped guarantees on nearly 1 billion pounds ($1.2 billion) of bank loans handed out to ailing businesses during the COVID-19 pandemic, leaving lenders on the hook for some of the borrowings that will not be repaid.

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Published by

01 Nov 2023

Previously unreported figures obtained by Reuters under a Freedom of Information (FOI) request show that the state-owned British Business Bank (BBB) — which administers the loan schemes — has removed state guarantees from 10,786 loans worth a combined 979 million pounds as of Oct. 11, shielding taxpayers from some losses.

While the amount is only a fraction so far of the 77 billion pounds of loans issued, the move follows pressure from lawmakers and Britain's public spending watchdog who criticised the programmes for being too lax. The figures could rise further — latest figures show just 17 billion pounds have been fully repaid by borrowers as of June 30.

Dozens of lenders took part in the government-backed schemes, including Britain's «Big Four» banks: Barclays, NatWest, Lloyds and HSBC. Barclays and HSBC