Mutuals lead the way in FLS lending
Meanwhile the other banks and lenders in the scheme reduced the loans on their books by £2.6 billion.
Adrian Coles, director-general of the BSA, said: “The Funding for Lending Scheme data published today by the Bank of England confirms that building societies and other mutual lenders continue to play a major role in lending into the real economy.”
Since the FLS reference period started at the end of June 2012, mutual lenders have increased the loans they have made to ‘households and businesses’ by £7.3bn, in contrast to a reduction of £9.1bn by other lenders.
Coles said: “A number of mutuals have now drawn from the scheme but even without this funding the sector has been expanding the volume of loans to support households and businesses to help them to realise their aspirations. In contrast many other large lenders continue to cut back on the loans they are making.”
The amounts drawn from the scheme in the first quarter of 2013 by mutuals totalled £2.3bn, compared to £0.3 bn by other lenders. Since the FLS opened, mutuals have drawn down a total of £4.6bn compared to £11.8bn by other lenders.
He added: “The scheme does present challenges to mutual organisations which will always rely on savers for the majority of their funding needs. As interest rates across the market decline, a balance needs to be struck between protecting savers and assisting borrowers, something that building societies and other mutuals are acutely aware of.”