By Claire West

Analysts are predicting that many banks, including part state-owned Lloyds and RBS, will report healthy profits for the first half of the year next week and in an interview with the Sunday Telegraph,Chancellor George Osborne is urging them to assist UK businesses rather than pay massive bonuses

"We have got to be pretty clear with the banks, as I was when I got them into my office a couple of weeks ago, that we will not tolerate banks piling the pressure on SMEs (small to medium size enterprises). They have an economic obligation to assist that sector and give it all the assistance that they got," the Chancellor said:
Echoing comments from Bank of England governor Mervyn King Osborne went on to say "Every small and medium-sized company that I have visited in recent weeks has had some problem with their bank -- either they have found it difficult to renew their overdraft or they demanded additional collateral, often someone's house. The danger is that, particularly next year, when there is a huge amount of refinancing required, that the small and medium-sized businesses suffer from a lack of access to working capital."