Summary:
- Total sterling lending to the UK private sector showed a net increase of £6.0bn (+0.6%) to £1,100bn. This was much lower than April’s rise of £9.9bn and well down on the average rise for the previous six months of £10.5bn.
- Net mortgage lending in May rose by an underlying £4.3bn, some £0.3bn higher than April but lower than the average increase in the previous six months of £4.5bn. Growth in overall unsecured personal lending (+£0.8bn) was £0.4bn stronger than April. Within this, loans & overdrafts rose by £0.7bn (compared with the recent average of +£0.6bn), whilst credit card borrowing increased by just £0.1bn, in line with the recent average.
- Lending to real estate, at +£0.5bn, was the largest component of lending to non-financial companies, although well down from both April and the six-month average of +£1.3bn. Lending to construction companies (+£0.4bn) increased for the eleventh consecutive month and lending to manufacturers increased by £0.2bn.
- Deposits from the private sector rose by £8.9bn (+1.1%) to £779bn. Of the total increase, personal deposits accounted for £2.0bn, well down on April and a little weaker than the recent monthly average (+£2.3bn).
David Dooks, BBA director of statistics, said: "Though May saw stronger lending to individuals from what now look like very subdued April figures, there is little change in the relatively weaker trends seen since the turn of the year. Mortgage lending was below its recent average and, although personal loans saw an average rise, credit card lending by the major banks continued at a very low level and in line with weak retail sales. Corporate demand was also muted, with lending only to companies related to commercial property showing any real demand."
Lending to individuals (after allowing for the effects of securitisations, loans acquired from special purpose vehicles, transfers, acquisitions, etc)
Net lending rose by £5,158mn in May, compared to £4,341mn in April and £5,790mn in May 2004. Mortgage lending accounted for £4,309mn of the rise, compared to April’s rise of £3,971mn. Within consumer credit, May saw an increase in loans & overdrafts of £723mn compared to April’s figure of +£426mn, while the increase in net lending on credit cards (£117mn) compared with a small fall in April but was much in line with the average for the previous six months.
Lending to financial companies decreased by £2,077mn, with falls in net lending to securities dealers (-£2,149mn) insurance companies & pension funds (-£594mn) countered by lending to other financial intermediaries of £670mn.
Lending to real estate companies (+£486mn) was lower than both April and the recent average (+£1,250mn). Lending to construction companies increased by £432mn, food, beverages and tobacco by £108mn, while lending to other manufacturing rose by £105mn.
