Table of Contents
Introduction
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- Definitions
- Methodology
- Abbreviations
- Market positioning
- The supplier
- The customer
Key Insights
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- When are the significant conduct costs facing the banks likely to ease?
- Will ring-fencing regulation affect services to commercial banking customers?
- What is happening to margins in the commercial banking sector?
- How are changes in the business population affecting the corporate banking business?
- Are challenger banks a threat to providers of mid-market and corporate banking services?
UK Economy
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- Overview
- Inflation
- Interest rates
- Consumer spending
- Manufacturing
- Imports
- Exports
Market Factors
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- Key points
- Slowdown at the start of 2015
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- Figure 4: GDP growth rate, 2012-15
- Large corporates taking greater share of private sector turnover
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- Figure 5: Business population in the UK, by company size, 2013-14
- Profitability and business investment rising in the private sector
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- Figure 6: UK PNFCs net rate of return, 2010-14
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- Figure 7: UK total business investment, 2010-14
- Steady decline in corporate insolvencies continues
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- Figure 8: Corporate insolvencies in the UK, 2010-14
- Reports of climbing confidence at odds with decline in M&A activity
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- Figure 9: Acquisitions of UK companies, 2011–14
Commercial Banking Market
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- Key points
- The wider banking industry is under strain...
- ...though there are some positive indicators for commercial banking
- Commercial deposits climb in line with economic recovery
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- Figure 10: UK MFIs sterling deposits from UK resident businesses, 2013-15
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- Figure 11: MBBG deposits from UK private non-financial corporations, 2010-14
Commercial Banking Segmentation
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- Key points
- Retail and real estate deposits rising
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- Figure 12: MFI sterling deposits of UK resident non-financial businesses, by industry type, March 2015
- SME sector performing strongly in wider recovery
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- Figure 13: MBBG deposits of small and medium-sized businesses, 2011-14
Commercial Borrowing
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- Key points
- Net lending to large businesses increases at start of 2015...
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- Figure 14: Net loans to large, non-financial businesses by UK MFIs, 2013-15
- ...while Funding for Lending focus has shifted to small businesses
- Rates remain flat while demand from the large corporate sector rises
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- Figure 15: Monthly average interest rate for UK MFI new advances to PNFCs, 2010-14
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- Figure 16: Availability of corporate credit to PNFCs in the last three months, 2010-14
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- Figure 17: Demand for corporate credit by PNFCs in the last three months, 2010-14
Market Trends
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- Key points
- Product and service innovation limited but new service model on the horizon
- Technology trials to benefit commercial banking customers
- High take up for online business banking facilities
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- Figure 18: Use of business banking features in the last three months, March 2015
- Impact of competition inquiry will depend on strength of regulatory will
Brand Communication and Promotion
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- Key points
- Ad spending lull follows surge over switching and brand reputation
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- Figure 19: Advertising expenditure on business banking services, 2010-15
- Lloyds far out in front on campaign expenditure
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- Figure 20: Advertising expenditure on business banking services, by advertiser, 2014-15
- Press advertising dominates channel spend
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- Figure 21: Advertising expenditure on business banking services, by media type, 2014-15
Industry Structure
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- Key points
- Industry development
- Challengers on the rise, but no match for major groups
- New authorisation process beginning to take effect
- Government scaling back involvement in banking sector
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- Figure 22: Cost to UK government of financial interventions in banking sector, February 2015
Aldermore Bank Plc
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- Recent company activity
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- Figure 23: Financial analysis of Aldermore Bank plc, 2010-14
Barclays Plc
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- Recent company activity
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- Figure 24: Financial analysis of Barclays plc, 2010-14
Clydesdale Bank Plc
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- Recent company activity
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- Figure 25: Financial analysis of Clydesdale Bank plc, 2010-14
Co-operative Bank
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- Recent company activity
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- Figure 26: Financial analysis of Co-operative Bank plc, 2009-13
HSBC
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- Recent company activity
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- Figure 27: Financial analysis of HSBC Bank, 2010-14
Lloyds Banking Group
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- Recent company activity
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- Figure 28: Financial analysis of Lloyds Banking Group, 2010-14
Royal Bank of Scotland Group
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- Recent company activity
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- Figure 29: Financial analysis of RBS Group, 2010-14
Santander UK Plc
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- Recent company activity
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- Figure 30: Financial analysis of Santander UK plc, 2010-14
Commercial Banking Forecast
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- Key points
- Growth dependent on wider economy’s performance
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- Figure 31: Forecast UK MFIs sterling deposits from UK resident non-financial businesses, 2015-19
- Costly ring-fencing requirements may raise fees and restrict credit
- New banks are changing the operating model
Further Sources and Contacts
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- Trade associations
- British Banking Association
- Trade publications
- The Banker
- Euromoney Institutional Investor
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