26th July 2016

June 2016 figures for the high street banks

Dr Rebecca Harding, BBA Chief Economist, said:

“This month’s High Street Banking data reflects the uncertainty that was felt ahead of the EU referendum.

“Business borrowing in June dropped for the first time in 2016, signalling that investment decisions were being delayed until after the vote.

“Mortgage lending and approvals also fell back in June but remain above the low levels seen in April following the introduction of the stamp duty surcharge.”

“Overall, business confidence was clearly fragile in anticipation of the outcome of the vote, but these results are not a verdict on the health of the economy post-Brexit. We won’t start to see that data come through until the autumn and any trends before then should not be over-interpreted”


Annual borrowing growth rates

hsbjune2016graph1

Household borrowing

Gross mortgage borrowing of £12.2bn in the month was 4% higher than in June 2015. Borrowing in the first half of 2016 was £79.9bn compared with £63.6bn in the same period of 2015.

Net mortgage borrowing is 3% higher than a year ago.

Consumer credit continues to show annual growth of over 6% possibly reflecting uncertainty and in the case of personal loans and overdrafts favourable interest rates.

Number of approvals

hsbjune2016graph2

Mortgage approvals

House purchase approval numbers have bounced back a little from the low numbers seen in April (following the surge in the first few months of 2016) but are still some 11% lower than in June 2015. However in the first half of 2016 numbers were 5.5% higher than in the same period of 2015.

Remortgaging approvals were 13% higher than in June 2015.

Other advances were 15% higher than a year ago.

Business borrowing annual growth rates

hsbjune2016graph3

Borrowing by non-financial companies

Borrowing by non-financial companies decreased by £526mn in June. This was the first fall in 2016.

Net capital market issues by non-financial companies decreased by £1.9bn in June however in the year to June, a total of £21.0bn (net) has been raised. This alternative finance compares with an
increase in bank borrowing of £3.4bn (net) over the same period.

Trends in net deposits

hsbjune2016graph4

Deposits

Personal deposits have been growing more strongly in recent months and annual growth has risen to 5%.

Non-financial companies deposits increased by an average of around £2-3bn a month in 2015 but have fallen back in 2016, taking their annual growth rate down from around 10% in 2015 to about 5% now.