(Updates with Barclays' response in the fifth paragraph.)
Barclays (BCS), HSBC (HSBC) and Starling Bank have stepped up legal action against companies that defaulted on taxpayer-backed Covid-era loans as the UK government pressures lenders to recover losses, the Financial Times reported Tuesday.
The banks have filed nearly 70 winding-up petitions since June against Bounce Back Loan recipients, many of which appear to have ceased trading or filed dormant accounts, according to the report.
The UK government has urged lenders to pursue dormant borrowers to recover losses from the scheme, estimated at 2.8 billion pounds, the report added.
Other banks are also expected to increase legal proceedings against Covid-era loan defaulters in the coming months, the FT reported, citing people familiar with the matter.
A Barclays spokesperson toldthat the bank is committed to recovering Bounce Back Loan liabilities where appropriate and may pursue various recovery options, including legal action where necessary.
HSBC did not immediately respond to' request for comment.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
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