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High street banking

embargoed until 9.30 am on Wednesday, 25 January 2012


BBA statistics director, David Dooks said: "Decembers 9bn of new mortgages was the strongest month of last year, being 12% higher than in December 2010. However, at the same time, the household sector generally is focusing on debt repayment amid inflated household expenses and a continuing air of uncertainty, so we see a reluctance to let net borrowing rise, with people preferring to use their bank account cash for expenditure. Business prospects are even more attuned to the state of the economy in the UK and in overseas trading markets, with borrowing intentions for growth or investment plans generally staying on the back-burner.

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December 2011
annual growth rates
16%

mortgages personal deposits

unsecured lending non-financial companies

8%

Annual growth of 1.5% in the banks net mortgage lending continues to outstrip annual growth of 0.6% across the whole lending market in November. Unsecured lending contracted by 1.4% in 2011, while personal deposits rose by only 2.5%. Throughout 2011, deposits and savings increased by a net 16bn compared with 31bn in 2010, as the incentive for holding bank deposits gave way to paying down debt and using cash for household expenditure.

0%

-8% Dec 08

Mar 09

Jun 09

Sep 09

Dec 09

Mar 10

Jun 10

Sep 10

Dec 10

Mar 11

Jun 11

Sep 11

Dec 11

bn

mortgage lending
value of approvals
(shifted forward 1 month)

Gross mortgage lending of 9.0bn in December was the strongest month of last year, some 12% higher than in December 2010. The small upturn in house purchase approvals over the second half of 2011 led to stronger gross mortgage lending, but with capital repayment by householders remaining at a high level, net mortgage lending increased by only 0.7bn in December and continues to be very subdued by historical comparison.

20

15
gross lending

10

5
net lending

0
Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11

Number
1,000,000

number of approvals

800,000

Approval activity in 2011 remained similar to the previous two years. The number of house purchase applications approved in 2011 was very similar to 2010, but remortgage approvals were up 3% in 2011. The average house purchase value (145,200) was similar to levels a year earlier. Approvals for other secured lending in 2011 continued to decline, being some 13.5% lower in 2011 than in 2010 and less than half the number seen in 2007.

600,000

400,000

200,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 house purchase approvals remortgage approvals other approvals

unsecured lending annual growth rates


Year on year retail sales growth in December was reflected in the increase in the number of credit card purchases in the month. New spending on cards was above the recent six month average, though as regularly seen, monthly spending is regularly more than offset by repayments. Demand from consumers for loans and overdrafts remains at levels similar to those during the past two years, with loan repayments continuing to outweigh new borrowing.
15% credit cards 10% 5% 0% -5% loans & overdrafts -10%
Dec 08 Mar 09 Jun 09 Sep Dec 09 09 Mar 10 Jun 10 Sep Dec 10 10 Mar 11 Jun 11 Sep Dec 11 11

business borrowing annual growth rates


20%

manufacturing
10%

construction exc. development* wholesale & retail

Demand for borrowing from industry remains subdued as economic concerns and confidence impact business borrowing behaviour, particularly in the manufacturing and construction sectors. *From January 2011 definitional changes to categories led to some series breaks. For comparative purposes, property related covers real estate activities & building development, construction covers all construction activities except building development.

0%

-10%

hotels & restaurants property related*

-20%

-30% Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec 08 09 09 09 09 10 10 10 10 11 11 11 11

All figures are seasonally adjusted unless otherwise specified as (nsa)


Mortgages (secured) net mortgage lending gross mortgage lending repayment of capital value of mortgage approvals house purchase re-mortgage other secured lending number of mortgage approvals house purchase re-mortgage other secured lending average approval value (nsa) house purchase re-mortgage other secured lending Consumer credit (unsecured) net consumer credit lending credit cards net credit card lending new spending repayments number of purchases loans & overdrafts net loan & overdraft lending new loans net overdraft lending (nsa) Personal deposit & savings net change in all personal deposits Lending to businesses (nsa) net lending to non-financial businesses net lending to financial businesses

Dec 2011

Nov 2011

average of six months prior to Dec 2011

amounts outstanding (nsa)

+ 0.7 bn 9.0 bn 7.8 bn 8.7 bn 5.3 bn 2.9 bn 0.5 bn 73,382 36,171 21,164 16,047

+ 0.5 bn 8.4 bn 8.1 bn 8.4 bn 5.1 bn 2.8 bn 0.5 bn 72,335 34,809 21,788 15,738

+ 0.8 bn 8.2 bn 7.5 bn 8.6 bn 5.0 bn 3.2 bn 0.5 bn 74,161 34,133 24,503 15,525

767.1 bn

145,200 137,300 29,200

146,400 129,900 29,600

147,000 130,000 29,000

- 0.0 bn

- 0.2 bn

- 0.1 bn

84.1 bn

+ 0.2 bn 7.2 bn 7.4 bn 119.0 mn

+ 0.1 bn 6.8 bn 7.0 bn 117.0 mn

+ 0.1 bn 6.9 bn 7.2 bn 115.1 mn

35.9 bn

- 0.2 bn 1.2 bn + 0.0 bn

- 0.3 bn 1.2 bn + 0.0 bn

- 0.2 bn 1.1 bn - 0.0 bn

48.2 bn 39.4 bn 8.8 bn

+ 0.7 bn

+ 1.8 bn

+ 1.8 bn

650.9 bn

- 2.3 bn - 3.0 bn

+ 0.4 bn - 12.7 bn

- 0.5 bn - 7.0 bn

309.0 bn 313.6 bn

Notes to editors 1. The main high street banking groups (MBBG) account for some two-thirds of all UK mortgage lending outstanding, provide around half of all consumer credit and, within that, some 60% of all new card credit based on the Bank of Englands lending to individuals data. They include the six largest UK retail lending groups: Santander UK (including Alliance & Leicester and Bradford & Bingley deposits), Barclays, HSBC Bank, Lloyds Banking Group, Northern Rock and Royal Bank of Scotland Group. 2. Following a change in statistical reporting in January 2010, securitised loan assets held within special purpose vehicles became included in their parent banks reported lending. The impact of this change was adjusted out of earlier flows. 3. The BBA is the leading UK banking and financial services trade association, representing members from 50 countries on domestic and international issues. Members provide the full range of banking and financial services, operating some 150 million accounts in the UK and making up the worlds largest international banking centre. 4. A note explaining lending terms is available http://www.bba.org.uk/statistics/article/lending-terminology. from the BBA website at

5. The introduction of the revised Standard Industrial Classification (SIC2007) in national statistics was reflected in the banks statistical reporting at end-January 2011 and impacts on some of the industry-level data covered by this release, where counterparties have been re-classified between sectors. Where possible, estimates of underlying movements have been made to continue consistent time-series trends.
Release dates: Data for the month of: BBA high street banking Bank of England information on monetary aggregates, sectoral deposits/borrowing and lending to individuals

December 2011 January 2012 February 2012 March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 October 2012 November 2012 December 2012

25 January 2012 23 February 2012 23 March 2012 26 April 2012 24 May 12 27 Jun 12 24 July 12 23 August 12 25 September 12 23 October 12 23 November 12 27 December 12 24 January 2012

31 January 2012 29 February 2012 29 March 2012 2 May 2012 30 May 2012 3 July 2012 30 July 2012 30 August 2012 1 October 2012 29 October 2012 29 November 2012 3 January 2012 30 January 2012 Ends