–Adds Detail To Version Transmitted At 1222 GMT

LONDON (MNI) – UK Chancellor of the Exchequer George Osborne has
said that the four major British banks and Santander have agreed to lend
more to businesses as a result of the Project Merlin talks, the talks
between the Treasury and banks over lending and pay.

Osborne announced a stg10 billion agreed increase in bank lending
in 2011 to small and mediums sized enterprises (SMEs) and that the major
UK banking groups had agreed to a number of disclosures and restrictions
on pay.

“There is a commitment from the four major banks and also from
Santander to make much more money available for lending to SMEs. Last
year, these banks lent stg66 billion to such businesses. Today, the
banks commit to lend stg76 billion to such businesses this year,”
Osborne said.

“Overall gross lending to all businesses large and small will
increase from stg179 billion to stg190 billion,” he added.

“The Bank of England has agreed to collect the relevant data and
publish it on a quarterly basis,” he said.

On bank remuneration, Osborne announced a stg2,000 cap on cash
bonuses at the two banks effectively under state control, RBS and

“The maximum upfront cash bonuses will be limited to a maximum of
stg2,000 this year. All Executive Directors, including the Chief
Executives, have agreed to receive this year’s bonuses entirely in the
form of shares. Directors will have to wait until 2013 to convert these
shares into cash,” he said.

–London bureau: +4420 7862 7499; email: ukeditorial@marketnews.com