It is hoped that publishing this detailed lending data will help to boost credit to homeowners and small businesses and will encourage smaller lenders to identify gaps in the market.
Chief Secretary to the Treasury Danny Alexander said that publishing the lending data was a “major step forward” for transparency, and added that it would enable businesses to see “exactly where the major banks are lending - up to within a few streets of their premises".
RBS, which recently launched an independent lending review to identify steps that the Group can take to enhance its support to small and medium sized businesses and the economic recovery while maintaining safe and sound lending practices, welcomed the decision to publish detailed lending information.
Ian Cowie, Chief Executive, RBS Business and Commercial Banking said: “We welcome this move to disclose lending across 10,000 postcode areas. We already lend more to SMEs than any other bank, and have £20bn of surplus deposits that we want to put to work.
“We want to lend to as many viable businesses in as many communities as possible – that is why we’ve launched an independent lending review. We’ve appointed regional lending experts across the UK – their job is to find new opportunities to finance growth locally and lend more.”
Ian Cowie, Chief Executive, RBS Business and Commercial Banking
RBS Group accounted for 36% of all SME lending in 2012, compared to its overall market share of 24%, and RBS and NatWest have now started proactively contacting business customers to advise them of how much more the banks could be willing to lend them.
The lending data - provided voluntarily by RBS Group, Lloyds Banking Group, HSBC, Barclays, Santander UK, Nationwide, and Yorkshire and Clydesdale Banks - will be published on a quarterly basis by the BBA and the Council of Mortgage Lenders. It will cover mortgage lending and personal loans as well as business lending, and data for each type of lending will be available separately for all of the postcodes covered. Credit card lending will not be included.
The British Bankers' Association (BBA) published SME lending data for 120 postcode areas in England and Wales on 23 July, which showed an increase in borrowing in only 22 areas last year.
Apart from Wales and the South West, firms in every region deposited more funds than they borrowed.
Anthony Browne, chief executive of the BBA, said: "In these difficult economic times many businesses are building up large cash reserves and paying down debts rather than taking on more borrowing."