Supply
- The availability of secured credit to households was reported to have increased slightly in the three months to end-May 2014. Lenders expected availability to be unchanged over the next three months.
- Lenders reported that the availability of unsecured credit to households increased in 2014 Q2, with a further slight increase anticipated in Q3.
- The overall availability of credit to the corporate sector was unchanged in Q2 according to lenders. An increase in availability was expected in Q3.
Demand
- Demand for secured lending for house purchase was reported to have increased significantly in 2014 Q2. Lenders expected demand to increase further over the next three months.
- Lenders reported that demand for credit card lending fell slightly in 2014 Q2, and expected little change in Q3. Demand for other unsecured lending products, such as personal loans, was unchanged in Q2 but was expected to increase in Q3.
- Demand for corporate credit was reported to have increased significantly in Q2 across all company sizes. Lenders expected further increases in demand in Q3.
Loan pricing
- Lenders reported that overall spreads on secured lending to households — relative to Bank Rate or the appropriate swap rate — narrowed in 2014 Q2. And spreads were expected to narrow further in Q3.
- Spreads on credit card lending were reported to have widened in Q2 and were expected to be unchanged in Q3. In contrast, spreads on other unsecured lending products narrowed, and a further significant fall was anticipated in Q3.
- Spreads on lending to small businesses were unchanged in Q2, while spreads for medium-sized companies and for large corporates narrowed significantly. These trends were expected to continue over the next three months.
Defaults
- Lenders reported that default rates on secured loans to households fell significantly in 2014 Q2, and were expected to fall further in Q3. Losses given default on secured loans to households also fell in Q2 and were expected to decrease slightly further in Q3.
- Default rates on unsecured lending fell significantly in Q2 for credit card lending and also decreased slightly for other unsecured loans. Losses given default were unchanged for both credit card lending and other unsecured loans in Q2.
- Default rates on corporate lending fell in Q2, particularly on lending to large corporates. Losses given default were unchanged for small companies but fell significantly for medium-sized companies and large corporates.
Credit Conditions Survey - 2014 Q2