Credit Conditions Survey - 2013 Q1

This quarterly survey of banks and building societies is aimed at improving our understanding of trends and developments in credit conditions.
Published on 03 April 2013

Supply

  • The availability of secured credit to households was reported to have increased in the three months to beginning-March 2013. And a further increase is expected by lenders over the next three months.
  • Lenders reported that the availability of unsecured credit to households also rose in 2013 Q1, with a further increase anticipated in Q2.
  • The overall availability of credit to the corporate sector was reported to have increased in Q1. But that increase was confined to large companies, with small and medium-sized companies reported to have experienced little change in credit availability. Lenders expected overall credit availability to the corporate sector to be little changed in Q2.

Demand

  • Demand for secured lending for house purchase was reported to have risen slightly in 2013 Q1. Lenders expected a significant increase in Q2, spread across demand for prime lending and buy-to-let lending.
  • Demand for total unsecured lending was reported to be little changed in 2013 Q1, but was expected to rise in 2013 Q2.
  • Lenders reported a significant decrease in demand for credit from small companies in Q1, a slight reduction in credit demand from medium-sized companies, and little change in demand from large companies. Credit demand was expected to increase across all firm sizes in Q2, with significant increases expected for small and large companies.

Defaults

  • Lenders reported that default rates on secured loans to households had been little changed in the three months to beginning-March, and losses given default had fallen slightly. Defaults were expected to rise slightly in 2013 Q2, but losses given default on secured lending were expected to fall a little further.
  • Default rates on total unsecured loans fell in 2013 Q1, with a further slight fall expected in Q2. Losses given default on total unsecured loans were little changed in Q1, with a slight increase expected in Q2.
  • Lenders reported a fall in default rates on loans to firms of all sizes during Q1. Default rates were expected to be little changed in Q2 for small and large firms, but to rise for medium-sized companies.
  • Losses given default fell for small and medium-sized companies in 2013 Q1, and were expected to be little changed in Q2. Losses given default for large companies were little changed in Q1, but were expected to rise slightly in Q2.

Loan pricing

  • Lenders reported that overall spreads on secured lending to households — relative to Bank Rate or the appropriate swap rate — tightened significantly again in 2013 Q1. And spreads were expected to tighten significantly further in Q2.
  • Spreads on total unsecured lending were reported to be little changed in 2013 Q1, and that was expected to continue in Q2. Within unsecured lending, spreads on credit card lending were reported to be little changed in 2013 Q1, but spreads on other unsecured lending had tightened.
  • Lenders reported that spreads on lending to small companies had tightened in 2013 Q1, and that spreads on lending to large and medium-sized companies had tightened significantly. A further tightening in spreads was expected for businesses of all sizes in Q2, with a slight tightening for small companies, and a significant tightening for large companies.

PDFCredit Conditions Survey -  2013 Q1

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