26th September 2016

August 2016 figures for the high street banks

Dr Rebecca Harding, Chief Economist at the BBA, said:

“The High Street Banking statistics published today point to a softer housing market, strong consumer credit and slightly weaker business borrowing in August. The data was collected before the Bank of England reduced interest rates to 0.25% and so give an indication of some of the underlying pressures that the MPC was responding to when it made this decision.

“Mortgage borrowing is growing at a slower pace than it has for the last few months reflecting both the slowdown in housing market growth after the April spike and broader trends in the sector.

“Given the low interest rate environment and high levels of confidence during the summer, the strong credit growth can be interpreted as strong consumer sentiment.

“Company deposits grew at an annual rate of 3.8% in August 2016 compared to 9% in August 2015 suggesting that companies may be using their own internal resources to fund working capital and growth requirements.”


Annual borrowing growth rates

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Household borrowing

  • Gross mortgage borrowing of £12.4bn in the month was 1% higher than in August 2015.
  • Net mortgage borrowing is just under 3% higher than a year ago.
  • Consumer credit continues to show annual growth of over 6% reflecting fairly strong retail sales and in the case of personal loans and overdrafts favourable interest rates.

Number of approvals

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Mortgage approvals

  • House purchase approval numbers are 21% lower than in August 2015 but in the first eight months of 2016 they are 2% lower than in the same period of 2015.
  • Remortgaging approvals were 6% lower than in August 2015 but in the first eight months of 2016 were 16% higher than in the equivalent period of 2015.
  • Other advances were 1% higher than a year ago.

Business borrowing annual growth rates

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Borrowing by non-financial companies

  • Borrowing by non-financial companies decreased by £0.1bn in August after a fairly strong rise in July.
  • Net capital market issues by non-financial companies decreased by £1.1bn in August however in the year to August 2016, a total of £10 bn (net) has been raised. This alternative finance compares with an increase in bank borrowing of £6.8bn (net) over the same period.

Trends in net deposits

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Deposits

  • Personal deposits have been growing more strongly in recent months and annual growth is at 4.7% in August. In the first eight months of 2016 personal deposits have grown by £27bn compared with £15bn in the same period of 2015.
  • Non-financial companies deposits increased by an average of around £2-3bn a month in 2015 but fell back in the first half of 2016 and are currently growing at an annual rate of 3.8% compared with around 10% in 2015.