4th Sep 2015 Back to top
  • Financial services and charities join forces to support vulnerable consumers

    The financial services industry, together with charities and consumer groups, has launched the very first Financial Services Vulnerability Taskforce in order to look proactively at the ways in which institutions can improve the experience of customers who may be in vulnerable circumstances. This new group builds upon the work many institutions have already done to help those who need support.…

  • Moving the vulnerability agenda forward

    Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, explains the role of the BBA’s new Financial Services Vulnerability Taskforce.

  • BBA Brief – 4 September 2015

    Smaller firms continue to borrow

    The amount of lending provided by banks and building societies taking part in the Bank of England’s Funding for Lending scheme rose by £490million between April and June as business confidence continued to improve, reports the Times (£, p44). Net lending was £648million in the first quarter of 2015 – putting the overall figure for the year at over £1billion. Commenting on yesterday’s figures, BBA Executive Director of Business Finance Irene Graham said: “These new figures underline that banks are helping smaller businesses do what they do best — drive economic growth and create jobs.”

    ECB raises spectre of more QE

    The European Central Bank has cut its forecasts for growth and inflation (FT, £, p1). ECB President Mario Draghi suggested that there could be further quantitative easing should global risks affect the eurozone’s recovery. He highlighted lower oil prices and the slowdown in China as major factors behind the revised forecasts. The ECB currently plans to buy about €60billion worth of mostly government bonds each month until September 2016.

    Property market is ‘dysfunctional’

    Britain’s property market is “dysfunctional” and building more homes will not resolve its problems, the Council of Mortgages Lenders’ chief economist has said. BBC News reports that Bob Pannell’s blog states that house sales remained “sluggish”, stuck at levels last seen in the mid-90s. He writes that the market is being stymied by high numbers of older people not downsizing to smaller properties and an increase in buy-to-let landlords.

3rd Sep 2015 Back to top
  • Bank support for SMEs – 2nd Quarter 2015

    Key points: Cash holdings continue to grow, reducing SME needs for bank finance. Deposit levels are growing by 9% annually and significantly exceed SME borrowing, by around £59 billion. For those SMEs applying for bank finance, approval rates are around 80% for smaller businesses and 90% for medium-sized. The second quarter saw 31,500 loans approved for SMEs. Medium businesses in particular are…

  • BBA responds to latest FLS data

    Commenting on the publication of the Bank of England’s Q2 2015 Funding for Lending Scheme statistics, BBA Executive Director of Business Finance Irene Graham said:

    “These new figures underline that banks are helping smaller businesses do what they do best – drive economic growth and create jobs.

    “Banks are using the Funding for Lending Scheme to lower the cost of borrowing for businesses. This means that lenders are offering a range of highly competitive deals at a time when interest rates are already at a record low.

    “Borrowers should feel confident about applying to their bank for finance. The SME Finance Monitor shows that nearly eight out of 10 businesses that applied for finance in the past 18 months were given the green light.”

     

  • BBA Brief – 3 September 2015

    Huge take up in pensioner bonds sparks fear about unfair competition for savers

    Building societies have criticised the Government’s drive to increase the take up of pensioner bonds for distorting the savings market. National Savings and Investments (NS&I) took in £5.4 billion in the three months to June – more than double the £2.1 billion inflow in the same period the year before. David Cutter, the chief executive of the Skipton Building Society and chairman of the Building Societies Association, said: “It’s clearly unwelcome. From our point of view, it’s not a level playing field. It makes it harder for other deposit-takers to compete. That has an impact on growth plans and mortgage affordability.”  The Times  (£, p37) reports that some deposit takers have argued that NS&I posed unfair competition because it was able to offer tax-free rewards and a government guarantee and had been instructed by the Chancellor to offer pensioner bonds carrying far higher interest rates than the market rate.

    IMF warns against rate rises

    Ahead of the G20 Finance Ministers meeting this weekend the International Monetary Fund has warned against raising interest rates as it is worried about faltering global growth (FT, £).  It also suggests that the European Central Bank (ECB) should expand its quantitative easing (QE) programme. The Telegraph (B4) looks at the five things that will affect the ECB’s thinking on whether further QE is necessary or not. Reuters predicts that the ECB is set to cut its inflation forecasts today because of falling oil prices and China’s economic slowdown, and that it will probably promise to beef up its bond-buying programme if prospects weaken further.

2nd Sep 2015 Back to top
  • BBA Brief – 2 September 2015

    New accounting rules “fundamentally flawed”

    Major European banks could be forced to recognise loan losses of as much as €61 billion due to new accounting rules, according to a Barclays study reported by the FT (£, online only). Barclays’ analysts found that the rules would cause an increase of around 34% in loan loss provisions across the group, as well as lower bank valuations and more volatile earnings. The paper adds that the Local Authority Pension Fund Forum has described the new rules on the financial instruments “fundamentally flawed” and its lawyer, George Bompas QC, believes that the new regime would still not give a “true and fair” view of banks’ financial position.

    Stock market volatility continues

    Volatility in Asia’s stock markets has continued this morning, with Shanghai opening down more than 4%, BBC News reports. Yesterday US stocks closed down nearly 3% after economic data was released suggesting that China’s manufacturing sector had contracted at its fastest pace for three years. The country’s official manufacturing purchasing managers’ index hit a three-year low of 49.7 in August, down from 50 in July, sparking a global market sell-off. CityAM (p2) quotes Naeem Aslam, chief market analyst at AvaTrade, saying: “The manufacturing PMI data is the measure of large state-owned firms and the reading not only fell short of expectations, but it also dipped into a negative territory and this makes the headline which traders certainly do not like at all.”

    Personality tests for credit mooted by researchers

    Some customers looking to borrow from their bank or building society might face psychometric tests to determine their chances of repaying the credit, according to the Daily Mail (p35). Research from the University of Edinburgh Business School has suggested that such tests can be effective. The paper quotes BBA Executive Director for Retail Banking Eric Leenders, saying: “I can never see psychometric testing replacing the straightforward affordability tests. However, it is possible that in some cases tests of this kind might be able to help determine whether a customer is vulnerable and needs extra support. It’s right that banks take a look at new types of technology that could perhaps benefit consumers.”

    Challengers to meet Government over tax surcharge

    The Daily Mail (p7) quotes Paul Lynam, chief executive of Secure Trust Bank and chairman of the BBA’s Challenger Bank Panel, describing the 8% corporation tax surcharge as “completely at odds” with the Government’s claim it supports challenger banks. The Mail also quotes BBA figures which show that banks will pay £39.35 billion in bank-specific taxes between 2010 and 2021. Yesterday it was reported that a group of challenger banks is to meet Charles Roxburgh, director general of financial services at the Treasury, to discuss the tax.

1st Sep 2015 Back to top
  • BBA responds to the latest Bank of England monthly Bankstats

    Commenting on the latest Bank of England monthly Bankstats, BBA Chief Economist Richard Woolhouse said:

    “Net mortgage lending is now back to pre-crisis levels. Together with the surge in mortgage approvals this provides further evidence that the housing market is hotting up.

    “In particular, it seems that shrewd consumers are rushing to remortgage and grab competitive deals before interest rates start to rise from current record lows.

    “The growing demand for unsecured lending also suggests that consumers are increasingly confident about the economic outlook.”

  • BBA Brief – 1 September 2015

    Banks challenge Treasury over profit surcharge

    Chief executives of the UK’s largest challenger banks will meet with Treasury officials this week to discuss concerns over the impact of the corporation tax surcharge, the Sunday Telegraph (B1) reported. Ahead of the meeting, a letter from the Chancellor to the challenger banks suggests the Government does not intend to make any swift changes, but states: “However, I want to take the time to listen to your concerns, carefully consider alternatives you put forward and give these serious consideration.” The 8% surcharge, set out in the Summer Budget, affects a wider range of institutions than the Bank Levy.

    Writing in CityAM (p23), Shadow Economic Secretary to the Treasury Alison McGovern states that the surcharge “risks stifling competition and acting as a restraint on sensible lending”. She warns that the “consequences for the long-term health of the financial services sector and the wider economy could be seriously damaging”.

    Lending to farmers increases at record pace

    Britain’s farmers successfully applied for £12.4 billion in credit in 2014, the highest annual increase since records began, reports the Telegraph (B3). BBA figures show that total lending to farmers and rural businesses rose from £11.1 billion in 2013 and £10 billion the previous year. Farmers in northern England and the south east enjoyed the largest increase in loan approvals of 15% in 2014. BBA Chief Executive Anthony Browne said: “An appetite to borrow is an important barometer of business optimism. With rates still low and a wide spread of lenders, there has rarely been a better time for businesses of all sectors to borrow.”

    Government launches review into anti-money laundering rules

    The Government last week announced a review to “improve the effectiveness of rules designed to prevent money laundering and terrorist financing”. The Weekend FT (p3) quoted Business Secretary Sajid Javid saying: “This new review is about making sure the rules we have to protect our strong financial services industry from abuse are not unintentionally holding back new and existing British business.” He added that the review would look at the implementation of existing legislation, and was not about “scrapping rules”. The article noted that the BBA welcomed the initiative, stating: “We want to make sure the system is targeted against criminals while not impacting disproportionately on genuine customers.”

    Growth in contactless payments

    The growth in use of contactless cards is expected to accelerate from today, the Times (£, p7) reports, as the limit for a single transaction rises from £20 to £30. CityAM (p9) quotes new figures from The UK Cards Association which show that spending on contactless cards rose to £2.5 billion in the first six months of 2015, with monthly spending almost doubling over that period. Saturday’s Mail (p34) reported that all retailers will have to provide contactless payment technology by 2020 under new rules introduced by Visa and Mastercard. BBA figures released in June revealed that consumers using contactless cards have together saved over 90 years of time since they were introduced.

  • Bank lending to farmers and other rural businesses grows by 24% in just two years

    New industry-wide figures published by the BBA show that bank lending to farms and other rural businesses increased by £1.3 billion last year – the largest rise since records began nearly 15 years ago.

    The amount lent by major retail banks to agricultural businesses in the North and the South East expanded most quickly, both increasing by 15% in 2014.

    However, there was growth in every region of the UK, with rises of 12% in Wales, Scotland and the North West.

    The BBA’s Annual Statistical Abstract shows that loans and overdrafts to agriculture, hunting and forestry businesses grew to £12.4 billion in 2014 – up from £11.1 billion a year before and £10 billion in 2012.

    This means the total volume of borrowing secured by this crucial part of the economy grew by £2.4 billion in two years – a rise of 24%.

28th Aug 2015 Back to top
27th Aug 2015 Back to top
26th Aug 2015 Back to top
  • Remortgaging hits four-year high, BBA figures say

    The BBA’s Chief Economist, Richard Woolhouse, and Research Analyst Aneta Dyakova explain what our latest High Street Banking Statistics say about the economy.

  • July 2015 figures for the high street banks

    Richard Woolhouse, Chief Economist at the BBA, said:

    “These figures show that thousands of us managed to tear ourselves away from the Ashes series to remortgage during July.

    “This was a 29% surge on 12 months before and the highest figure we’ve seen for four years. Savvy homeowners are snapping up competitive deals before an expected increase in interest rates.

    “There were concerns that new regulations had made applying for a mortgage more onerous. But remortgaging is still a straightforward process that can take even less time than Alastair Cook and his men took to beat Australia.”

19th Aug 2015 Back to top
14th Aug 2015 Back to top
  • Banking activity in Northern Ireland – Q1 2015

    There were 7% more SME loan approvals in Q1 than in the same quarter a year earlier. Representing an approval rate of 9 in 10 applications, the value of new lending was some 33% higher, reflecting higher average loan values.

    Borrowing stocks in the construction and real estate sectors continue to reduce, as a result of larger businesses repaying borrowing or using alternative finance, or debt being written-off or sold.

    Household deposits and borrowing remain fairly static.