Regulatory Update

Secured and unsecured lending continue to show divergent pictures


18/08/2006

Latest figures from the Major British Banking Groups, for July 2006, show that:

         

  • Total sterling lending to the UK private sector showed a net underlying increase of £14.2bn (+1.2%) to £1,241bn. This was slightly higher than the previous months underlying rise of £13.7bn though below the average of £15.5bn over the previous six months.

  • Net mortgage lending rose by an underlying £5.7bn. This was slightly above the £5.6bn rise in June and exceeded the monthly average of +£5.3bn over the previous six months. Unsecured personal lending rose by £0.3bn overall in July, in line with an average rise of £0.3bn over the previous six months. Loans & overdrafts (+£0.6bn) more than accounted for the rise, whilst underlying credit card borrowing fell by £0.3bn.

  • Lending rose to real estate companies by £1.4bn and to construction by £1.1bn, whilst lending to transport, storage & communication fell by £0.6bn.

    • For further information, please contact:
    Brian Capon, Head of Media Relations (020 7216 8810 brian.capon@bba.org.uk )
    David Dooks, Director of Statistics (020 7216 8837 david.dooks@bba.org.uk )

    Notes to Editors:

    1. The MBBG comprise the banking groups of Abbey, Alliance & Leicester, Barclays, Bradford & Bingley, HBOS, HSBC Bank, Lloyds TSB, Northern Rock and The Royal Bank of Scotland; a full list of banks covered is attached overleaf.

    2. The definitional content of these tables is consistent with the provisional M4 statistics (covering all monetary financial institutions) released today by the Bank of England. 'M4' reflects the non-bank, non-building society part of the UK private sector (including individuals). As the MBBG statistics cover a substantial part of sterling lending by all banks to the private sector, they may provide an indication of the direction of total bank lending.

    3. Although the total lending figure makes allowance for write-offs, no adjustments can be made to the industrial categories: reductions in lending may thus be exaggerated and increases understated.

    4. Data are affected by loan securitisations (where lending is transferred off the balance sheet to a special purpose vehicle or de-securitisations and loans removed from special purpose vehicles when lending is brought back onto the balance sheet), loan book transfers or acquisitions. The tables reflect the movements reported on the balance sheet, but 'underlying' figures are quoted in the text, where these effects (indicated by footnotes to Table 4) have been removed, thus reflecting the underlying, or 'real' business movements.

    5. Statistical releases relating to the business of the MBBG are available on the internet in the 'News Room' section of the BBA website.

    6. The next MBBG release (to be issued on 25 August) will provide more detail on the banks' mortgage lending and consumer credit, giving gross data and loan approval information.

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