September 2007 figures for the MBBG

Source: Exec Digital UK

Date :18/10/2007 15:37:31

Financial figures for September released by the BBA showed a slowdown in mortgage lending following on from fewer loan approvals in August.

David Dooks, BBA Director of Statistics, said "The financial markets difficulties, which led to customers withdrawing money from Northern Rock, resulted in a weak personal deposits picture in September, although overall there was still a small inflow to the major banks. Slightly lower mortgage lending in September followed on from fewer loan approvals in August, but the recent trend is little changed and consumer credit, despite a rare, for recent times, rise in card borrowing, remained very subdued."

The BBA is the leading UK banking and financial services trade association and acts on behalf of its members on domestic and international issues. Our members, from 60 different countries, collectively provide the full range of banking and financial services. They operate some 130 million personal accounts, contribute £50 billion to the economy, and together make up the world's largest international banking centre.

Total sterling lending to the UK private sector rose by an underlying £19.8 billion (+1.4%) to £1,394 billion. This was stronger than the underlying rise of £16.0 billion in August and an average of +£13.5 billion over the previous six months.

The definitional content of these tables is consistent with the provisional M4 statistics (covering all monetary financial institutions) released today by the Bank of England. 'M4' reflects the non-bank, non-building society part of the UK private sector (including individuals). As the MBBG statistics cover a substantial part of sterling lending by all banks to the private sector, they may provide an indication of the direction of total bank lending.

Net mortgage lending rose by an underlying £5.8 billion. This was lower than the £6.1 billion recorded in the previous month but a little higher than the £5.6 billion recent monthly average. Underlying credit card borrowing rose by £0.1 billion, while loans and overdrafts also rose by £0.1 billion.

Lending to real estate companies rose by £1.5 billion while lending increased to construction by £0.6 billion and to wholesale & retail trade by £0.5 billion, while lending to transport, storage & communication fell by £0.5 billion.

Deposits from the private sector rose by £3.6 billion (+0.4%) to £1,019 billion. Personal deposits increased by £0.3 billion, the smallest increase for over 3 years and well down on the recent average monthly growth of £3.2 billion.

Total net lending rose by an underlying £6,032 million in September, compared to £5,747 million in August and £5,083 million in September 2006. Of the total rise, mortgages accounted for an underlying £5,847 million, compared to increases of £6,063 million in August and £5,257 million in September last year. Consumer credit rose by £184 million overall; personal loans & overdrafts rose by £114 million compared to Augusts fall of £251 million, while credit card lending rose by £70 million compared to a fall of £71 million in August and an average monthly fall of £116 million over the previous six months.

The Major British Banking Groups comprise of Abbey, Alliance & Leicester, Barclays, Bradford & Bingley, HBOS, HSBC Bank, Lloyds TSB, Northern Rock and The Royal Bank of Scotland.

The next MBBG release is to be issued on 25 October and will provide more detail on the banks' mortgage lending and consumer credit, giving gross data and loan approval information.

Lending to non-financial firms

Lending to real estate companies rose by £1,512 million while lending increased to construction by £634 million and to wholesale & retail trade by £506 million, while lending to transport, storage & communication fell by £460 million.