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Personal Loans Market Assessment 2008

  • ID: 604969
  • May 2008
  • Region: United Kingdom
  • 186 Pages
  • Key Note Ltd
1 of 4

FEATURED COMPANIES

  • Alliance & Leicester Plc
  • Barclays Plc
  • Cattles Plc
  • HBOS Plc
  • HSBC Bank Plc
  • Lloyds TSB Group Plc
  • MORE

The UK consumer credit market, along with other forms of borrowing, increased strongly in the early years of the 21st century. However, the growth rate has since fallen dramatically, with the ending of house-price inflation, which is even likely to reverse during the economic slowdown in 2008. While the total amount lent is still at historically high levels, personal loans are no longer as profitable as other forms of lending that carry higher interest rates or are secured against property. Some firms, such as London Scottish, have already left the market with heavy losses.

Banks remain dominant as lenders and their position is assured by their ability to command leading positions in all forms of lending. This diversifies their risk in a dynamic market and, if the market for personal loans diminishes, allows them to focus on credit cards or on secured lending. In 2008, credit cards also appear to have peaked in terms of use. The banks' focus on student loans and their participation in the provision of basic accounts indicates that they are interested in generating customer loyalty among groups to whom they do not already lend.

As a group, building societies have been weakened READ MORE >

Note: Product cover images may vary from those shown
2 of 4

FEATURED COMPANIES

  • Alliance & Leicester Plc
  • Barclays Plc
  • Cattles Plc
  • HBOS Plc
  • HSBC Bank Plc
  • Lloyds TSB Group Plc
  • MORE

Executive Summary

1. Introduction
BACKGROUND
DEFINITION

2. Strategic Overview
ECONOMIC INDICATORS
Population
Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 2003-2007
Gross Domestic Product
Table 2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2003-2007
Inflation
Table 3: UK Rate of Inflation (%), 2003-2007
Unemployment
Table 4: Actual Number of Unemployed Persons in the UK (million), 2003-2007
Household Disposable Income
Table 5: UK Household Disposable Income Per Capita (£), 2003-2007
Consumer Confidence
Table 6: The Nationwide Consumer Confidence Index (%), February 2007-February 2008
MARKET DYNAMICS AND SEGMENTATION
Introduction
Market Trends
Table 7: Total UK Consumer Credit by Gross Lending by Sector (£m and index 2003=100), 2003-2007
Market Size
Table 8: Total UK Consumer Credit by Amount Outstanding by Sector (£m and index 2003=100), 2003-2007
REGULATION
The Consumer Credit Act 1974
Protection Under the Act
Cancelling a Credit Agreement
Default Notice
Court Orders
Unfair Agreements
Suing the Seller or Credit Provider
Written Information
The Consumer Credit Act 2006
Consumer Credit Act 2006 — Main Provisions
Advertising Regulation and the Financial Services Authority
DISTRIBUTION
COMPETITIVE STRUCTURE
Debt
THE CONSUMER
MARKET FORECASTS

3. Banks
BACKGROUND
MARKET TRENDS
Table 9: UK Consumer Credit by Gross Lending by Banks (£m and index 2003=100), 2003-2007
MARKET SIZE
Table 10: UK Consumer Credit by Amount Outstanding with Banks (£m and index 2003=100), 2003-2007
MARKET SHARE
Table 11: UK Banks' Individual Group Balances by Loans and Advances to Customers (£bn), 2007
DISTRIBUTION
THE CONSUMER
Loan Repayment Fees
Overdrafts

4. Building Societies
BACKGROUND
MARKET TRENDS
Table 12: UK Consumer Credit by Gross Lending by Building Societies (£m and index 2003=100), 2003-2007
MARKET SIZE
Table 13: UK Consumer Credit by Amount Outstanding with Building Societies (£m and index 2003=100), 2003-2007
MARKET SHARE
Table 14: The Top Ten Building Societies in the UK by Assets (£m), 31st December 2007
DISTRIBUTIOn
THE CONSUMER

5. Other Consumer Credit Lenders
BACKGROUND
MARKET TRENDS
Table 15: UK Consumer Credit by Gross Lending by Other Consumer Credit Lenders (£m and index 2003=100), 2003-2007
MARKET SIZE
Table 16: UK Consumer Credit by Amount Outstanding with Other Consumer Credit Lenders (£m and index 2003=100), 2003-2007
MARKET SHARE
DISTRIBUTION
THE CONSUMER
Motor Finance
The Cost of Credit
Motor Advertising
Consumer Dynamics

6. Retailers
BACKGROUND
MARKET TRENDS
MARKET SIZE
STORE CARDS

7. Insurance Companies and Other Lenders
INSURANCE COMPANIES
Background
Market Trends
Market Size
OTHER LENDERS
Supermarkets
Consumer Dynamics
The Post Office
Credit Unions
Advertising
Consumer Dynamics

8. Personal Loans
BACKGROUND
CONSUMER CREDIT
Credit Scores
UNSECURED LENDING
Market Trends
Table 17: 12-Month Growth Rate for Unsecured Lending to Individuals (%), 31st December 2003-2007
Advertising
Table 18: Main Media Advertising Expenditure on Unsecured Personal Loans (£000), Year Ending December 2007
Suppliers
Payment-Protection Insurance
ONLINE PERSONAL LOANS
Comparison Websites
THE CONSUMER
Comparing Lenders' Offers on a Website
Borrowing from an Internet-Based Lender
Taking Out Payment-Protection Insurance
HOME CREDIT
The Competition Commission's Investigation
Remedies to be Implemented by November 2008
Market Size
Market Share
Pricing — APR and Total Charge for Credit

9. Secured Lending
BACKGROUND
MARKET TRENDS
Table 19: UK Loans Secured on Dwellings by Net Advances (£m and index 2003=100), 2003-2007
MARKET SIZE
Table 20: UK Loans Secured on Dwellings by Amount Outstanding (£m and index 2003=100), 2003-2007
ADVERTISING
Intermediaries
Table 21: Main Media Advertising Expenditure on Secured Personal Loans (£000), Year Ending December 2007
SUPPLIERS
THE CONSUMER
Taking Out Secured Loans
Difficulties Getting a Loan Due to Low Income
Difficulties Getting a Loan Due to Poor Credit Record

10. Credit Cards
BACKGROUND
MARKET TRENDS
Table 22: UK Consumer Credit on Credit Cards by Gross Lending (£m and index 2003=100), 2003-2007
MARKET SIZE
Table 23: UK Consumer Credit on Credit Cards by Amount Outstanding (£m and index 2003=100), 2003-2007
ADVERTISING
Table 24: Main Media Advertising Expenditure on Credit Cards and Store Cards (£000), Year Ending December 2007
THE CONSUMER
Credit-Card Borrowing

11. Debt
OVERINDEBTEDNESS
BANKRUPTCY AND INSOLVENCY
Table 25: Individual Insolvencies in England and Wales (number and index 2003=100), 2003-2007
ADVERTISING
Table 26: Main Media Advertising Expenditure on Debt Management Services (£000), Year Ending December 2007
SUPPLIERS
GOVERNMENT ACTION
Loans Debt
National Strategy for Financial Capability
Impairment Charges
THE CONSUMER
The Ease of Getting a Loan
Saving to Avoid Debt
Loan Repayment Concerns
Borrowing from Multiple Lenders

12. An International Perspective
INTRODUCTION
THE EURO AREA BANK LENDING SURVEY JANUARY 2008
Table 27: Changes in Credit Standards as Applied to the Approval of Loans to Households (%), October 2007-January 2008
Approvals
Conditions and Terms
DEMAND FOR LOANS

13. PEST Analysis
POLITICAL FACTORS
ECONOMIC FACTORS
SOCIAL FACTORS
TECHNOLOGICAL FACTORS

14. Consumer Dynamics
OVERVIEW
Table 28: Summary of Results (% of respondents), 2006 and 2008
DEBT AND TAKING OUT LOANS
I Think it is Too Easy to Get a Loan Nowadays
I Save Up in Advance to Avoid Debt
I Intend Paying Off My Personal Borrowing Early
Table 29: Attitudes Towards Debt (% of respondents), 2008
I Think Interest Rates Should be Capped
I Take Out Payment-Protection Insurance on My Personal Loans
I Prefer to Borrow Using My Home as Security
Table 30: Attitudes Towards Capping Interest Rates, Taking Out Payment-Protection Insurance and Secured Lending (% of respondents), 2008
I Don't Mind Having Loans from Several Lenders
I Worry About Repaying My Personal Loan
I Intend Taking Out a Personal Loan in the Next Year
Table 31: Attitudes Towards Loans (% of respondents), 2008
CHOOSING A LENDER
I Choose a Lender Because of Its Reputation
I Compare Lenders' Offers on a Website Before Choosing One
I am Happy to Borrow Based on Direct-Mail Advertising
Table 32: Attitudes Towards Choosing a Lender (% of respondents), 2008
SOURCES OF BORROWING
I Am Happy to Borrow on My Credit Card
I Am Happy to Borrow from a Supermarket
I Am Happy to Borrow from the Retailer's Own Lender
Table 33: Attitudes Towards Borrowing from Credit Cards, Supermarkets and the Retailer's Own Lender (% of respondents), 2008
I Am Happy to Borrow from an Internet-Based Lender
I Am Happy to Borrow from a Telephone-Based Lender
I Am Happy to Borrow from a Credit Union
Table 34: Attitudes Towards Borrowing from Internet-Based and Telephone-Based Lenders, and Credit Unions (% of respondents), 2008
DIFFICULTIES IN GETTING A LOAN
I Have Difficulty Getting a Loan Because of My Poor Credit Record
I Have Difficulty Getting a Loan Because I Have a Low Income
Table 35: Difficulties in Getting a Loan (% of respondents), 2008

15. Company Profiles
ALLIANCE & LEICESTER PLC
Corporate Strategy
New Product and Brand Developments
Distribution
Advertising
Profitability
Table 36: Financial Results for Alliance & Leicester PLC (£000, number, % and £), Years Ending 31st December 2005-2007
Future Company Developments
BARCLAYS PLC
Corporate Strategy
New Product and Brand Development
Distribution
Advertising
Profitability
Table 37: Financial Results for Barclays PLC (£000, number, % and £), Years Ending 31st December 2005-2007
Future Company Developments
CATTLES PLC
Corporate Strategy
Distribution
Advertising
Profitability
Table 38: Financial Results for Cattles PLC (£000, number, % and £),Years Ending 31st December 2005-2007
Future Company Developments
HBOS PLC
Corporate Strategy
New Product and Brand Development
Distribution
Advertising
Profitability
Table 39: Financial Results for HBOS PLC (£000, number, % and £), Years Ending 31st December 2005-2007
Future Company Developments
HSBC BANK PLC
Corporate Strategy
New Product and Brand Development
Distribution
Advertising
Profitability
Table 40: Financial Results for HSBC Bank PLC (£000, number, % and £), Years Ending 31st December 2004-2006
Future Company Developments
LLOYDS TSB GROUP PLC
Corporate Strategy
New Product and Brand Development
Distribution
Advertising
Profitability
Table 41: Financial Results for Lloyds TSB Group PLC (£000, number, % and £), Years Ending 31st December 2005-2007
Future Company Developments
LONDON SCOTTISH BANK PLC
Corporate Strategy
New Product and Brand Development
Distribution
Advertising
Profitability
Table 42: Financial Results for London Scottish Bank PLC (£000, number, % and £), Years Ending 31st October 2005-2007
Future Company Developments
PROVIDENT FINANCIAL PLC
Corporate Strategy
New Product and Brand Development
Distribution
Advertising
Profitability
Table 43: Financial Results for Provident Financial PLC (£000, number, % and £), Years Ending 31st December 2005-2007
Future Company Developments
THE ROYAL BANK OF SCOTLAND GROUP PLC
Corporate Strategy
New Product and Brand Development
Distribution
Advertising
Profitability
Table 44: Financial Results for The Royal Bank of Scotland Group PLC (£000, number, % and £), Years Ending 31st December 2005-2007
Future Company Developments

16. The Future
THE ECONOMY
Unemployment
Table 45: Forecast Actual Number of Unemployed Persons in the UK (million), 2008-2012
Inflation
Table 46: Forecast UK Rate of Inflation (%), 2008-2012
Population
Table 47: Forecast UK Resident Population by Sex (000), Mid-Years 2008-2012
Gross Domestic Product
Table 48: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2008-2012
FORECASTS
Market Trends
Table 49: Forecast Total UK Consumer Credit by Gross Lending by Sector (£m and index 2008=100), 2008-2012
Market Size
Table 50: Forecast Total UK Consumer Credit by Amount Outstanding by Sector (£m and index 2008=100), 2008-2012
CONCLUSION

17. Further Sources
Associations
Publications
General Sources
Government Sources
Other Sources
Bisnode Sources

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3 of 4

- Alliance & Leicester Plc
- Barclays Plc
- Cattles Plc
- HBOS Plc
- HSBC Bank Plc
- Lloyds TSB Group Plc
- London Scottish Bank Plc
- Provident Financial Plc
- The Royal Bank of Scotland Group Plc

Note: Product cover images may vary from those shown
4 of 4
Note: Product cover images may vary from those shown

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