10th October 2016

Record rise in bank lending to farmers

As farmers across the country draw harvest to a close, new industry-wide figures published by the BBA show that bank lending to farms and other agricultural businesses increased by £1.5 billion last year – the largest rise since records began nearly 20 years ago.

New data from the BBA’s Annual Statistical Abstract shows that high street banks provided loans and overdrafts totalling £13.9 billion to agricultural, hunting and forestry businesses in 2015 – a 12 per cent increase on the £12.4 billion total in 2014. Total lending to these businesses in 2015 was at the highest level on record.

The amount lent by major retail banks to agricultural businesses in the East Midlands expanded most quickly, increasing by almost a third (32.8 per cent) to the end of February 2015. Every region of the UK saw lending expand in the same period, with the exception of Wales which had seen a 21.5 per cent increase the previous year.

This means the total volume of borrowing secured by this crucial part of the economy has grown by over 50 per cent in four years.

Commenting on the figures, BBA CEO Anthony Browne said:

“Bankers and farmers could not be more different in the eyes of most people. The two sectors are typically located in separate parts of the country and play very different roles in the economy.

“It’s important to recognise, however, that both sectors share a mutually beneficial relationship. The fresh produce that people buy in shops or get delivered to their doorstep is not only grown by farmers, it is funded by banks.

“In the face of volatile commodity prices, banks are supporting farmers in these tough times. It is vital that farmers can secure the finance that they need to invest in crops, machinery or livestock. These figures show that banks are providing this lending at record levels.

“With interest rates at an historic low, there has rarely been a better time for businesses of all sectors to borrow.”

ENDS

Journalists that would like access to the BBA’s Annual Statistical Abstract should email press@bba.org.uk or call 020 7216 8989.

To purchase the Annual Statistical Abstract click here.

Notes to editors

Table 1: High street retail banks’ Sterling Lending to UK Resident Businesses

£ billions end-December 2009 2010 2011 2012 2013 2014 2015
Agriculture, Hunting & Forestry 8.5 8.9 9.2 10.0 11.1 12.4 13.9

 

Table 2: High street retail banks’ Advances to Agriculture, Hunting, Forestry & Fishing

£ millions
Region end-February     2009 2010 2011 2012 2013 2014 2015
South East 1,307 1,388 1,361 1,344 1,515 1,631 1,701
South West 1,097 1,152 1,239 1,280 1,432 1,923 2,016
East Anglia 778 787 833 972 1,041 1,282 1,389
East Midlands 636 701 789 788 875 1,176 1,562
West Midlands 826 943 1,034 1,031 1,079 1,203 1,444
Yorkshire & Humberside 538 583 604 598 705 867 951
North West 466 428 451 607 672 965 1,053
Northern 416 440 461 443 561 721 762
Wales 833 887 919 929 995 1,209 1,164
Scotland 1,102 1,083 1,034 1,036 1,126 1,309 1,420
Total  7,999 8,392 8,725 9,028 10,002 12,285 13,462

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