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Big Society Bank fears dismissed

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There is “no suggestion” of four high street banks pulling out of a deal to invest £200m in the Big Society Bank, according to the Cabinet Office.

The Financial Times reported that bankers are “furious” because the Big Society Bank will make a loss in its first five years, with relatively low returns after that. This could mean that the banks get no return on their investment.

There was an agreement in February for HSBC, Barclays, Royal Bank of Scotland and Lloyds to put money into the project on “commercial terms” as part of the Merlin deal on banks’ lending targets.

Banks are still negotiating with the Cabinet Office over the terms of the deal, and further meetings are planned.

A Cabinet Office spokesman said: “At present, there is no suggestion that this money won’t be invested as the banks have agreed and we’re absolutely on course to start investing in good causes this summer.”

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