Explanatory Notes - Industrial analysis of banks' deposits and lending
OVERVIEW
AVAILABILITY
SOURCES
DEFINITIONS
VALUATION AND BREAKS
FURTHER INFORMATION
OVERVIEW
These data collate information on deposits from and lending to UK residents other than MFIs and are separated into 18 broad industrial categories, based upon the SIC classification system. Until Q3 2007, the analysis of lending covered loans, advances (including under reverse repos), finance leasing, acceptances and facilities (all in sterling and other currencies) provided by reporting banks to their UK resident non-bank non building society customers, as well as bank holdings of sterling and euro commercial paper issued by these resident customers. Following a review of statistical data collected, acceptances and holdings of sterling and euro commercial paper are no longer collected at the industry level detail with effect from Q4 2007 data. Total lending therefore reflects loans and advances (including under reverse repos) only, from Q4 2007 data.
Published non-seasonally adjusted lending data exist from 1975 with unadjusted deposits data available from 1997 (based on SIC92). Publication of data will usually occur on the 25th working day following the end of the reporting period in statistical release Analysis of bank lending to and deposits from UK residents. These data are also published in Tables C1.1 to C1.3 of Monetary and financial statistics (Bankstats) or subject to the published schedule of releases.
SOURCES
UK-resident banks report data directly to the Bank of England on forms AD and AL. Approximately 150 banks with eligible liabilities over £400mn or private sector deposits or loans over £1,000mn report the data on a quarterly basis.
DEFINITIONS
Definitions of individual industrial categories (including examples) can be found here.
Counterparty classification is determined by the main activity of the entity, irrespective of ownership (public or private) with lending to unincorporated businesses and non profit institutions serving households (NPISH), allocated according to the appropriate trade or profession.
Private non-financial corporations
Private non-financial corporations (items 1-14) are those which exist to produce goods and provide non-financial services. They are mainly public limited companies, private companies and partnerships where these are distinct from their owners and not owned by government.
Other financial corporations
Other financial corporations (Items 15-17) are private financial corporations (other than monetary and financial institutions) engaged primarily in provision of financial services. Examples include financial intermediation, insurance companies and pension funds and activities auxiliary to financial intermediation (e.g. fund management).
Information regarding the relationship between these data and those within sectoral M4 and M4 lending can be found in the article ‘A comparison of the industrial analysis of bank lending to and deposits from UK residents and sectoral M4 and M4 lending’ in the January 2005 edition of Bank of England: Monetary and Financial Statistics.
Instrument coverage:
Deposits include money placed on both sight and time deposit as well as the cash leg of any repo (borrowing under repo).
Deposits placed by fund managers consists of money placed on behalf of UK investment and unit trusts, UK money market mutual funds, UK insurance companies and pension funds, UK individuals, other UK residents, non-resident clients and unidentifiable clients.
Loans and advances include the cash leg of reverse repos (lending under repo) and amounts lent under the DTI special scheme for domestic shipbuilding for UK buyers, but not funds placed through the local government money market or funds lent to UK banks, UK building societies or non-residents.
Acceptances (until Q3 2007) are for bills accepted by reporting institutions under facilities granted to UK residents (other than UK banks or building societies) that are still outstanding; those discounted by the reporting institution itself are advances rather than acceptances.
Holdings of sterling commercial paper (until Q3 2007) were incorporated within loans and advances in 1991, holdings of euro commercial paper (until Q3 2007) were incorporated in January 1999.
Facilities data consist of the total amount of overdraft, loan and acceptance facilities outstanding, both drawn and undrawn.
The figures for loans and advances also include, indistinguishably, the following: secured money placed with Stock Exchange money brokers and gilt-edged market makers; holdings of time deposits placed with, and certificates of deposit issued by, building societies; prior to May 1989, holdings of securities issued by building societies having an original maturity of one year or more, and with effect from May 1989, including securities of all maturities; amounts lent under the Department of Trade and Industry special scheme for domestic shipbuilding for UK buyers (classified under manufacturing).
This data does not include funds placed through the local government money market, nor funds lent to UK banks or non-residents. From December 1997, building societies were excluded from the data categories.
VALUATION AND BREAKS
The current SIC 92 coding was preceded by a change from SIC 68 to SIC 80 in 1983 and from SIC 80 to SIC 92 in 1997. Data for sterling lending which bridges the change from SIC 80 to SIC92 using condensed SIC80 and SIC92 categories are available both seasonally adjusted and non-seasonally adjusted. These data should be taken with some warning, as although broadly consistent, small changes in category definition may be evident.
Aside from classification changes arising from amendments to the SIC, there have also been other classification changes, changes in reporting methods, and changes in reporting institutions. Such changes are adjusted to take account of factors that might otherwise significantly distort them, for example restructuring of company groups; and are footnoted in each series at the point they may impact.
At end-March 1993 the definition of bank ‘lending for house purchase’ (now known as ‘lending secured on dwellings’) changed. The net effect of the re-definition has been to boost lending to individuals ‘secured on residential property’, with a corresponding reduction in ‘other advances to persons’. The changes shown in these tables have been adjusted to exclude the estimated effect of the re-definition.
The classification of deposits from the Issue Department of the Bank of England was amended prior to the publication of data for 1998 Q3. Previously these deposits were assigned to public administration and defence. Hence following the creation of a separate central bank sector on 1 April 1998, Q2 1998 sees a sizable fall in the coverage of this Table which now excludes both deposits from and deposits with both the Banking and Issue Departments of the Bank of England. Flows for public administration and defence for Q2 1998 have been adjusted to remove this effect.
Data timing changes:
From 1975 data was collected on the third Wednesday of the month in February, May, August and November. The reporting day was changed to the end of the month in 1986.
At end-March 1993, the industrial analysis moved to end-calendar quarter basis. The analysis of the period to end-December 1993 therefore covers thirteen months, and thus the changes are not directly comparable with those for the previous years.
Data was not collected in Q3 1997 therefore levels for this period are interpolated and flows for both Q3 1997 and Q4 1997 are estimated.
A more comprehensive exposition of the changes made to the dataset in 1997, along with further information on the data, can be found in the article 'The new industrial analysis of bank deposits and lending' in the January 1999 edition of Bank of England: Monetary and Financial Statistics.
FURTHER INFORMATION
Further information on the industrial analysis of bank deposits from and lending to UK resident can be found using the following links.
Westley, K (1999), 'The new industrial analysis of bank deposits and lending' Monetary and Financial Statistics, January 1999, pages 1-5.
Golcher, R and Wall, S (2005), ‘A comparison of the industrial analysis of bank lending to and deposits from UK residents and sectoral M4 and M4 lending’ Monetary and Financial Statistics, January 2005, pages 9-12
