UPDATED: Blame falls on RBS as banks 'miss' small business lending target

The UK's biggest banks missed the government's 2011 targets for lending to small companies and the blame is being put on the taxpayer-backed Royal Bank of Scotland (RBS), press reports claim.

According to Sky News, the organisations failed to fulfil the Project Merlin pledge to lend an overall £76bn to small companies by around £1bn in 2011.

Barclays, HSBC, Lloyds Banking Group and Santander UK have publicly said they met their individual targets but according to the broadcaster, RBS, which is 82% owned by the taxpayer, missed its share.

The figures are due to be officially revealed on Monday.

News that the targets have not been reached follows confirmation by the Treasury that the government will not be imposing lending limits on the banks in 2012. Instead, ministers are focusing on the launch of a £20bn 'credit easing' programme to provide cheaper loans to SMEs.

Full details of the initiative, known as the National Loan Guarantee Scheme, are expected to be included in chancellor George Osborne's Budget statement in March.

UPDATE:

BBC journalist Joe Lynam has claimed that RBS lent two-and-a-half times more to small businesses than its competitors but still missed its target. The limit imposed on RBS was higher due to being a state-controlled bank. He tweeted: