Contents:

OUR VIEW 1 CATALYST 1 SUMMARY 1 ANALYSIS 2 Lenders are increasingly coming up against a saturated UK consumer credit market 2 The UK consumer credit market is contracting 2 The UK consumer credit market is also highly competitive 2 Unsurprisingly, lenders margins are falling in the saturated consumer credit market 3 Indeed, the UK consumer credit market is the most mature of all of Western Europe 3 Consumer credit plays a more important role in the UK economy than it does in any other Western European market 3 Moreover, in terms of new lending, the UK has performed poorly in comparison to the majority of the Western European markets 4 Consequently, UK lenders should look into higher growth European markets to expand 5 A number of international players have further expanded their operations in Western Europe 5 In particular, there remain opportunities in the Spanish consumer credit market 6 The Spanish consumer credit market continues to expand 6 A number of foreign lenders have become involved 7 The market continues to hold potential 7 As an example, Barclaycard is taking advantage of this growing market 7 Barclaycard is growing successfully in Spain 7 Barclaycard entered the Spanish market directly 9 Barclaycards product range is designed to appeal to a range of customer segments 9 Barclaycard is likely to expand further in Spain by offering a wider range of products 10 In addition, the Turkish consumer credit market remains attractive to foreign acquisition 10 Turkey is the fastest growing consumer credit market in Western Europe 10 A number of reasons can explain Turkeys phenomenal growth 11 A number of international players have developed a significant presence in the market 11 As an example, GE Money now has a 25.5 per cent stake in Garanti Bank 12 Garanti Bank is a major player in the Turkish consumer credit market 12 By making such an acquisition, GE Money now has claim to a growing business in this market 13 But there are inherent risks in entering such a market 13 APPENDIX 14 Supplementary data 14 Definitions 16 Balances outstanding 16 CAGR 16 Consumer credit 17 Gross advances 17 Methodology 17 Further reading 17 European consumer credit reports 17 UK consumer credit reports 18 Forthcoming consumer credit briefings 18 Relevant links 18 Ask the analyst 19 Our consulting 19 Disclaimer List of Tables Table 1: Western European markets consumer credit balances outstanding as a proportion of their GDP, 2005 14 Table 2: Growth in consumer credit gross advances in Western European countries, 2001-2005 15 Table 3: Consumer credit gross advances in Spain, 2001-2005 15 Table 4: Number of credit cards in Spain in issue by competitor, 2005 16 Table 5: Consumer credit gross advances in Turkey, 2001-2005 List of Figures Figure 1: The UK is the most mature of Western European consumer credit markets as a proportion of GDP, 2005 4 Figure 2: From 2001 to 2005, new lending in the UK has been slower than most European consumer credit markets, 2001-2005 5 Figure 3: Consumer credit in Spain has witnessed a solid expansion, 2001-2005 6 Figure 4: La Caixa and BBVA dominate the Spanish credit card market, but Barclaycard is now fourth in terms of number of cards in issue, 2005 8 Figure 5: Barclaycard Spain now offers a range of credit cards in order to appeal to different customer segments, October 2006 10 Figure 6: Consumer credit gross advances are rising rapidly in Turkey, 2001-2005 11