Unsecured Loans to Business in the UK - Key Trends and Opportunities up to 2018

Published: Sep, 2014 | Pages: 76 | Publisher: Timetric
Industry: Financial Services | Report Format: Electronic (PDF)

Synopsis
This report provides market analysis, information and insights into the UK lending to business industry
It provides a breakdown of the different forms of lending to business in the UK
It analyses drivers and the outlook for the market
It provides information on the main banks in the UK market
It covers news and regulatory developments

Summary
The lending to business industry is beginning to stabilize following the recession. The lending to business industry in the UK has recorded little signs of growth since 2011, but has somewhat stabilized since the financial crisis. Net lending to non-financial businesses declined by GBP109.5 billion from 2008 to 2009, while lending to Private Non-Financial Corporations (PNFCs) declined by just under 35% (in terms of annual change) between the start of both 2008 and 2010, which emphasizes the impact of the crisis.
The affordability of business loans has declined since 2009, when the Bank of England reduced interest rates to a record low of 0.5%. This has contributed to a sharp rise in repayments, as companies have been keen to pay off as much debt as possible before the rates rise ? anticipated to be early 2015.
The government has made several attempts to reinvigorate business lending over the last couple of years, however, its projects have all missed their targets. The flagship Funding for Lending scheme declined short of its GBP80 billion target by GBP20 billion in 2012, while Project Merlin was GBP1.1 billion shy.
The rising of the emergency 0.5% bank rate is set to make attaining credit more expensive for banks and subsequently businesses. With banks already wary of lending to smaller businesses this may result in a decline in loan approvals, while businesses themselves are likely to be deterred by the prospect of more expensive loans.
Commercial retail estate lending is the largest market within the lending to business industry and was one of the main drivers of the UK's 2008 financial crisis. Lending declined by just over GBP6.0 billion (in terms of net lending flows) from the beginning of 2007 to the end of 2009, falling considerably more than any other market.
The industry is dominated by mainstream banks, with Royal Bank of Scotland, Lloyds, Barclay, HSBC and Santander controlling over 80% of the market. Regulations and high costs mean it is a difficult industry to enter, a situation that is unlikely to change in the immediate future.
Scope
This report provides market analysis, information and insights into the UK lending to business industry
It provides a breakdown of the different forms of lending to business in the UK
It analyses drivers and the outlook for the market
It provides information on the main banks in the UK market
It covers News and regulatory developments
Reason To Buy
Gain an understanding of the UK lending to business industry
Key Highlights
The lending to business industry in the UK has recorded little signs of growth since 2011, but has somewhat stabilized since the financial crisis. The affordability of business loans has declined since 2009, when the Bank of England reduced interest rates to a record low of 0.5%. This has contributed to a sharp rise in repayments, as companies have been keen to pay off as much debt as possible before the rates rise ? anticipated to be early 2015.

 1 Executive Summary 2
2 Introduction 8
2.1 What is this Report About? 8
2.2 Definitions 8
2.3 Methodology 9
3 Market Alysis 11
3.1 Market Background 11
3.2 Market Size 13
3.2.1 Stock of lending 13
3.2.2 New term lending 15
3.2.3 Net lending 17
3.2.4 Lending to business by sector 26
3.3 Loans by type 29
3.3.1 Overdrafts 29
3.3.2 Syndicated lending 31
3.4 Market drivers 33
3.4.1 Interest rates 33
3.4.2 Cash deposits 36
3.5 Cost and Availability of Credit 38
3.6 Market Outlook 41
4 Economic Backdrop 42
4.1 Real GDP growth 42
4.2 Labor Market Conditions 43
4.3 Housing Market 45
4.4 Disposable Income 48
4.5 Interest Rates 49
5 Competitive Landscape 50
5.1 Market Shares 50
6 Porter's Five Forces Alysis 51
6.1 Bargaining Power of Suppliers: Medium 51
6.2 Bargaining Power of Buyers: Low 52
6.3 Barriers to Entry: Medium to High 52
6.4 Intensity of Rivalry: Low to Medium 52
6.5 Threat of Substitution: Low to Medium 52
7 Regulation and Policy 53
7.1 Regulators 54
7.1.1 Prudential Regulation Authority (PRA) 54
7.1.2 Fincial Conduct Authority (FCA) 54
7.1.3 Monetary Policy Committee (MPC) 54
7.1.4 Treasury Committee 54
7.1.5 Competition and Markets Authority (CMA) 54
7.2 Recent Changes 55
7.2.1 Funding for lending scheme 55
7.2.2 Quantitative easing 55
7.2.3 Project Merlin 56
7.2.4 British Business Bank Investment Program 56
7.2.5 Banking Reform Act 2013 57
7.2.6 RBS SME Independent Review 57
7.2.7 2014 Budget announcement 58
7.2.8 Queen's speech 2014 58
7.2.9 Lending To Business - SWOT Alysis 59
7.3 Upcoming Regulations 59
7.3.1 Basel III 59
8 Deals 60
9 News 61
10 UK Retail Banks 63
10.1 Barclays PLC - Company Overview 63
10.1.1 Barclays PLC- profile 63
10.1.2 Barclays PLC - main competitors 63
10.1.3 Barclays PLC -board of directors 64
10.2 HSBC Bank PLC - Company Overview 65
10.2.1 HSBC Bank PLC - profile 65
10.2.2 HSBC Bank PLC - main competitors 65
10.2.3 HSBC Bank PLC -board of directors 66
10.3 Lloyds Banking Group PLC - Company Overview 67
10.3.1 Lloyds Banking Group PLC - profile 67
10.3.2 Lloyds Banking Group PLC - main competitors 67
10.3.3 Lloyds Banking Group PLC - board of directors 68
10.4 Santander UK PLC - Company Overview 68
10.5 Santander UK PLC - profile 68
10.5.1 Santander UK PLC - main competitors 69
10.5.2 Santander UK PLC - board of directors 69
10.6 The Royal Bank of Scotland Group - Company Overview 70
10.6.1 The Royal Bank of Scotland Group PLC - profile 70
10.6.2 The Royal Bank of Scotland Group PLC - main competitors 70
10.6.3 The Royal Bank of Scotland Group PLC - board of directors 71
11 Statistics 72
11.1 Review Period: 2009-2013 72
11.2 Forecast Period: 2014-2018 73
12 Appendix 74
12.1 Methodology 74
12.2 Contact Timetric 74
12.3 About Timetric 74
12.4 Timetric's Services 75
12.5 Disclaimer 76


List of Tables
Table 1: Lending to Business Definitions 8
Table 2: UK Annual New Term Lending to Small Businesses Growth Rates Forecast 23
Table 3: UK Annual New Term Lending to Medium-sized Businesses Growth Rates Forecast 24
Table 4: UK Annual New Term Lending to Large Businesses Growth Rates Forecast 25
Table 5: The UK Lending to Business Market-SWOT Alysis 59
Table 6: Barclays PLC, Key Facts 63
Table 7: Barclays PLC, Board of Directors 64
Table 8: HSBC Bank PLC, Key Facts 65
Table 9: HSBC Bank PLC, Board of Directors 66
Table 10: Lloyds Banking Group PLC, Key Facts 67
Table 11: Lloyds Banking Group PLC, Board of Directors 68
Table 12: Santander UK PLC, Key Facts 68
Table 13: Santander UK PLC, Board of Directors 69
Table 14: The Royal Bank of Scotland Group PLC, Key Facts 70
Table 15: The Royal Bank of Scotland PLC, Board of Directors 71
Table 16: The UK - Lending to Business Market (GBP Billion), 2009-2013 72
Table 17: The UK - Lending to Business Market (GBP Billion), 2014-2018 73