20 things

The Major British Banking Groups

4 March 2006

• The Major British Banking Groups (MBBG) accounts for two-thirds of all mortgage lending outstanding, and around 70 per cent of gross lending. Additionally, it provides over half of all consumer credit outstanding and, within that, 70 per cent of all card credit.
• The MBBG includes 12 of the 15 largest mortgage lenders in the UK. It includes lenders such as the Abbey, Alliance & Leicester (A&L), Barclays and Woolwich, Bradford & Bingley (B&B), HBOS (through Halifax and Bank of Scotland), HSBC Bank, Lloyds TSB (through Cheltenham & Gloucester (C&G)), Northern Rock, Royal Bank of Scotland (RBoS) and National Westminster.
• The British Banking Association (BBA) in its assessment of MBBG figures revealed gross lending for January reached £14.5 billion, the highest January total on record. However this revealed a significant drop of 14 per cent from December''s total. The figure was also only marginally above the total in January from 2004.
• The report revealed gross mortgage lending figures for January 2006 were 25 per cent higher than the total reached in January 2005.
• Seasonally adjusted net mortgage lending (that takes into account gross lending minus repayments and redemptions), rose by £4.6 billion in January 2006, compared with £5.3 billion in December 2005.
• Mortgage approvals for January 2006 reached a total value of £12.7 billion, with 140,020 mortgage approvals, for all purposes during the month. This figure showed an 8 per cent increase from January 2005''s total.
• However, the BBA report also revealed the average approval for house purchases stood at £126,800 - a fall from previous months'' figures.
• 8Approvals of house purchase loans were 32 per cent higher than January 2005s total in number, and almost 50 per cent (47) higher by value.
• The BBA revealed remortgaging levels dropped by 2 per cent for January 2006, but exceeded the January 2005 totals for value, with an increase of 7 per cent.
• The equity release market continued to grow at a steady rate, with loans up 1 per cent in number for January, compared to 12 months previously. Equity release value also increased, albeit at a faster rate, by 10 per cent over the same period.
• Net lending on loans and overdrafts rose by £0.6 billion in January; double the average of the previous six months of £0.3 billion.
• Credit card net lending rose by 0.1 billion, in line with the average increase, while net lending showed an increase of £609 million for consumer credit.
• The annual growth rate of seasonally adjusted net mortgage lending reached 12 per cent for January 2006.
• Consumer credit for net lending on personal loans and overdrafts showed an increase of £609 million from December''s total, with new lending on personal loans and overdrafts higher than the average for the previous six months at £3,135 million.
• New borrowing on credit cards reached £7,805 million in January, a 1 per cent increase from the December 2005 total.
• The BBA stated total sterling lending to the UK private sector showed a net underlying increase of £14.8 billion, an increase of 1.3 per cent to £1,163 billion. This was much stronger than both the previous month''s underlying rise of £10.2 billion and the average of plus £9.4 billion over the previous six months.
• David Dooks, BBA director of statistics, said: "Seasonally adjusted net mortgage lending fell back to around the recent trend in January and the level of approvals, in particular for equity withdrawal, held up well in what is traditionally a slow month. Whilst credit card lending continued to be subdued, consistent with the current weakness in retail sales, lending on loans and overdrafts was stronger than of late, with a greater use being made of overdrafts."
• MThe report revealed that lending to real estate companies was the largest component of lending to non-financial companies, rising by £0.8 billion, while lending to construction companies rose by £0.3 billion and to manufacturers by £0.2 billion. It further revealed lending to financial companies rose by £5,076 million in January mainly reflecting borrowing by miscellaneous financial intermediaries, a rise of £5,749 million, partly offset by repayments by investment and unit trusts, which reported a drop of £861 million.
• Deposits from the private sector rose by £4.6 billion, a rise of 0.6 per cent to £828 billion. Of the total, personal deposits increased by £2.3 billion compared with average growth of £2.5 billion in the previous six months.
• Figures shown for net changes in amounts outstanding are consistent with the Bank of England''s Monetary & Financial Statistics, which show lending to individuals by banks and building societies excluding the effects of securitisations and loan transfers. However from January 2005 the series are adjusted to remove fluctuations arising from intra-group transactions between banks and their non-bank subsidiaries, providing a better indication of underlying trends in mortgage lending.