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.

Barclays and HSBC did not immediately respond to MT Newswires' request for comment.

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