No plans to take part in tranche

London: HSBC Holdings Plc has no plans to participate in the first tranche of the UK government's £20 billion (Dh116.5 billion) small business lending programme, according to people with knowledge of the situation.

The bank uses little wholesale funding and relies on deposits to lend, said one of the people, who declined to be identified as the plan hasn't been made public. The government's proposal would penalise the bank for this model and be less profitable, the person said.

HSBC hit its 2011 target for lending in the UK under a government-sponsored plan, providing £38.8 billion and £11.7 billion to small businesses, it said in January. Europe's largest bank will hire 50 international commercial managers to help UK customers trade abroad, it said then.

The National Loan Guarantee Scheme, an insurance programme to underwrite money raised by banks in wholesale markets, may expand to £40 billion, Chancellor of the Exchequer George Osborne said.