Part-nationalised British bank Lloyds said on Friday it had beaten targets laid down by the government for lending to small businesses, as authorities keep the country's banks under pressure to lend out more to boost the faltering UK economy.

Last year, the Conservative/Liberal Democrat coalition government struck a deal with the major British banks known as Project Merlin, in which the banks pledged to lend more to businesses in return for legislative restraint.

Lloyds, which is 40 percent owned by the government after a state bailout during the 2008 credit crisis, said it lent out 12.5 billion pounds to small-and-medium-sized enterprises (SMES) in 2011 - ahead of a 11.7 billion target under the Merlin deal.

Lloyds has pledged to lend at least 12 billion pounds to SMEs in 2012 and to keep its net lending amount positive.

(Reporting by Sudip Kar-Gupta, Editing by Mark Potter)