Table of Contents
Executive Summary
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- The market
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- Figure 1: Aggregated value of outstanding debt in loan books secured on UK commercial property, 2010-14
- Loan originations are climbing to signal a recovery
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- Figure 2: Gross value of annual loan originations, 2010-14
- Market factors
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- Figure 3: Number of non-residential property transactions, 2006-14
- Low rates finally bearing fruit
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- Figure 4: Monthly average interest rate for UK MFI new advances to PNFCs, 2010-14
- Non-bank lenders’ presence rising
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- Figure 5: Gross value of loan originations, by type of lender, 2014
- Companies
- HSBC targets small businesses with commercial finance
- Shawbrook building commercial mortgage presence
- What we think
Introduction
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- Definitions
- Methodology
- Abbreviations
- Market positioning
- The supplier
- The customer
Key Insights
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- What commercial opportunities can lenders exploit?
- To what extent are P2P lending platforms a threat to banks?
- How is the regulatory inquiry into small business banking likely to impact the market?
UK Economy
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- Overview
- Inflation
- Interest rates
- Consumer spending
- Manufacturing
- Imports
- Exports
Market Factors
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- Key points
- Output growth slows at the start of 2015
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- Figure 6: GDP growth rate, 2012-15
- Rates remain low for commercial lending
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- Figure 7: Monthly average interest rate for UK MFI new advances to PNFCs, 2010-14
- Commercial property transactions on the rise
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- Figure 8: Number of non-residential property transactions, 2006-14
- Write offs on loans to non-financial companies have fallen since 2011
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- Figure 9: Quarterly write offs of loans to PNFCs from banks and building societies, 2010-14
- Demand for credit from large corporate sector rising
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- Figure 10: Availability of corporate credit to PNFCs in the last three months, 2010-14
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- Figure 11: Demand for corporate credit by PNFCs in the last three months, 2010-14
Commercial Mortgage Market
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- Key points
- Business expansion underpins increased demand
- Smaller providers enjoying success
- Effects of financial crisis still being felt...
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- Figure 12: Aggregated value of outstanding debt in loan books secured on UK commercial property, 2010-14
- ...but loan originations are climbing to signal a recovery
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- Figure 13: Gross value of annual loan originations, 2010-14
Commercial Mortgage Segmentation
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- Key points
- UK banks and building societies hold largest share of loans
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- Figure 14: Value of outstanding loan books secured on UK commercial property, by type of lender, 2014
- Industrial and hotel sectors increasing their share of loan allocation
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- Figure 15: Allocation of outstanding loans to investment and owner-occupied property, by type of use, 2014
- Non-bank lenders taking a rising share of new loans
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- Figure 16: Gross value of loan originations, by type of lender, 2014
Commercial Borrowing
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- Key points
- Banks’ net lending to businesses back into the black
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- Figure 17: UK MFIs gross lending and repayments from non-financial businesses, 2013-15
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- Figure 18: Net loans to non-financial businesses by UK MFIs, 2013-15
- Funding for Lending focus has shifted to small businesses
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- Figure 19: Net loans to UK SMEs from FLS participants, 2014-15
Market Trends
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- Key points
- Smaller banks shifting product terms and launching new finance offerings
- Nascent P2P commercial mortgage sector is growing
Brand Communication and Promotion
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- Key points
- Bank ad spend diverted to restoring reputation
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- Figure 20: Expenditure on advertising commercial mortgages, 2010-14
- Press advertising dominates channel spend
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- Figure 21: Expenditure on advertising commercial mortgages, by media type, 2010-14
Industry Structure
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- Key points
- Industry development
- Challengers targeting SME market
- New authorisation process is beginning to take effect...
- ...though the population of banks and building societies is largely unchanged over past two years
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- Figure 22: Number of banks and building societies operating in the UK, 2013-15
Aldermore Bank Plc
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- Recent company activity
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- Figure 23: Financial analysis of Aldermore Bank plc, 2010-14
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- Figure 24: Analysis of SME Commercial Mortgages division of Aldermore Bank plc, 2012-14
Barclays Plc
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- Recent company activity
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- Figure 25: Financial analysis of Barclays plc, 2010-14
HSBC
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- Recent company activity
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- Figure 26: Financial analysis of HSBC Bank, 2010-14
Lloyds Banking Group
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- Recent company activity
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- Figure 27: Financial analysis of Lloyds Banking Group, 2010-14
Principality Building Society
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- Recent company activity
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- Figure 28: Financial analysis of Principality Building Society, 2010-14
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- Figure 29: Principality Building Society commercial lending segment analysis, 2014
Royal Bank of Scotland Group
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- Recent company activity
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- Figure 30: Financial analysis of RBS Group, 2010-14
Santander UK Plc
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- Recent company activity
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- Figure 31: Financial analysis of Santander UK plc, 2010-14
Shawbrook Bank
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- Recent company activity
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- Figure 32: Financial analysis of Shawbrook Bank plc, 2011-14
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- Figure 33: Commercial mortgage advances of Shawbrook Bank plc, 2012-14
Commercial Mortgage Forecast
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- Key points
- Uncertainty over recovery but growth expected to continue
- Rising transactions to drive new commercial mortgage lending
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- Figure 34: Forecast gross value of loan originations, 2015-19
- Total value of outstanding loans to stabilise over coming five years
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- Figure 35: Forecast value of outstanding loans secured on UK commercial property, 2015-19
- Strong environment for property acquisitions
Further Sources and Contacts
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- Trade associations
- National Association of Commercial Finance Brokers
- Trade publications
- Commercial Reporter
- Bridging & Commercial
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