Lloyds Banking Group’s recruitment finance arm has seen an 8% contraction in lending to the recruitment industry. However, there are some cautious grounds for optimism that the worst may be over.

Paul Saunders, director of Lloyds recruitment finance division, says: “We are now payrolling more agency workers through Cash Friday than in the first quarter of 2009. We are starting to see some flattening out and things are not getting worse.”

Saunders says that Lloyds finance division “has £200m out to 1,400 agencies with a combined annual turnover of £2.3bn”.

Saunders estimates that Lloyds has around 12% of the market, which has contracted by 16%-17% overall.   Saunders was speaking at the release of the Recruitment and Employment Confederation’s ‘Turnover & Key Volumes Report’, in the City.