Credit Conditions Survey - 2011 Q2

This quarterly survey of banks and building societies is aimed at improving our understanding of trends and developments in credit conditions.
Published on 30 June 2011

Supply

  • The availability of secured credit to households was reported to have been broadly unchanged in the three months to early June 2011. Lenders expected availability to remain flat in the next three months.
  • Lenders reported that the availability of unsecured credit to households was little changed in 2011 Q2. Availability was expected to increase in Q3.
  • The availability of credit to corporates of all sizes was reported to have been broadly unchanged in 2011 Q2. And availability was expected to remain broadly unchanged in Q3.

Demand

  • Lenders reported that demand for secured lending for house purchase had increased a little in 2011 Q2, after having fallen in the previous two quarters. But lenders expected demand to fall in the coming quarter. Demand for buy-to-let lending was reported to have risen substantially in Q2 and was expected to continue to increase in Q3.
  • Demand for unsecured lending was reported to have been broadly unchanged over the past three months. Lenders reported that they expected a slight increase in demand for credit card lending in the next three months.
  • Lenders reported a moderate increase in demand for credit from large companies and a more marked increase from small and medium-sized businesses in 2011 Q2. Lenders did not expect demand for credit from the corporate sector to continue to increase in Q3.

Defaults

  • Lenders reported that the default rate on secured loans to households was broadly unchanged over the previous quarter, but that it was expected to increase in the coming quarter. Losses given default were reported to have increased for the third consecutive quarter in 2011 Q2 and were expected to increase again in Q3.
  • Default rates on unsecured loans were reported to have fallen for the seventh successive quarter. But losses given default on credit card loans increased in 2011 Q2 and were expected to increase further in Q3.
  • Over the previous three months, default rates on loans to private non-financial corporations (PNFCs) fell a little for large companies and small businesses and were unchanged for medium-sized companies. Lenders expected default rates to continue to fall a little for large and medium-sized PNFCs but increase slightly for small businesses. Losses given default were reported to have fallen a little for large and medium-sized companies and to have fallen more markedly for small businesses.

Terms and conditions

  • Lenders reported that spreads on secured lending to households were broadly unchanged in 2011 Q2. Lenders expected secured lending spreads to fall in Q3.
  • Spreads on credit card lending were reported to have been unchanged over the previous quarter, and were not expected to change in the coming quarter. Spreads on other unsecured lending products were reported to have fallen slightly in 2011 Q2, and were expected to fall further in Q3. Lenders reported that credit scoring criteria were broadly unchanged on credit card lending but had been loosened on non credit card lending.
  • Spreads on lending to medium and large PNFCs were reported to have fallen over the previous quarter, and were expected to continue to fall over the coming quarter. For small businesses, spreads were reported to have been broadly unchanged in 2011 Q2, but were expected to increase in Q3.

PDFCredit Conditions Survey - 2011 Q2

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