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From 1 July 2017, the finance and banking industry operating in the UK will be represented by a new trade association, UK Finance. It will represent around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation will take on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.x
The BBA’s latest high street banking data shows that consumer credit growth was 6.4% in April, compared with 6.1% in the previous month.
Gross mortgage borrowing totalled £13.4 billion in April.* Net mortgage borrowing was 2.4% higher than a year ago.
Eric Leenders, BBA Managing Director for Retail Banking said:
“As the Spring sunshine picked up in April, so did consumer spending. Annual growth in consumer borrowing from the main high street banks** grew due to increased customer use of credit cards. This was also reflected by an uplift in retail sales volumes, particularly among food retailers over the Easter period.
House purchase approvals were largely in line with last year’s average, though remortgaging approvals have dipped slightly in recent months despite historically low interest rates.
Business lending in April was fairly flat possibly reflecting the current uncertain climate.”
Annual borrowing growth rates
Gross mortgage borrowing in April totalled £13.4bn much in line with recent months. Gross borrowing in April was 10% higher than a year before though data in April 2016 was still to some extent distorted by deals being brought forward ahead of the April 1st deadline for the increase in stamp duty on second homes so comparison with last year is less appropriate.
Net mortgage borrowing in April was 2.4% higher than a year ago.
Consumer credit annual growth was 6.4% in April, compared with 6.1% in March. The increase was driven by stronger credit card borrowing (6.4%) reflecting stronger retail sales, while growth in personal loans and overdrafts slowed from 6.8% to 6.4%.
Number of approvals
House purchase approval numbers in April of 40,750 were slightly down on the monthly average of 41,959 over the previous six months.
Remortgaging approval numbers of 23,074 were 10% lower than in April 2016 and down on the monthly average of 26,569 over the previous six months.
Other advances approved were 0.6% higher by number than in April last year.
Business borrowing annual growth rates
Borrowing by non-financial companies
Borrowing by non-financial companies decreased by £0.6bn in April, partly due to short-term borrowing within the public admin sector unwinding. The annual growth rate of 2.9% in April was lower than March but higher than in recent months.
Net capital market issuance in the first four months of 2017 was £4.4bn (net) compared to £9.0bn (net) in the first four months of 2016.
Deposit annual growth rates
The annual growth in personal deposits continued in April the downward path seen since September last year and at 2.7% is the lowest annual growth rate since December 2011.
ISA cash deposits with the high street banks rose by £1.5bn in April compared with £2.1bn in April 2016 and the annual growth rate is -2.7%.
Non-financial companies’ deposits are currently growing at an annual rate of 4.3%.
*This is 10% higher than April 2016, although the data from this month was still, to some extent, distorted by deals being brought forward ahead of the April 1st deadline for the increase in stamp duty on second homes. A comparison with last year is therefore less appropriate than usual.
**Figures referred to as ‘High Street Banks’ in this release relate to the UK activity of 21 institutions across the banking groups of Barclays, HSBC Bank, Lloyds Banking Group, Royal Bank of Scotland Group, Santander UK, TSB and Virgin Money.