Table of Contents
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- Market size
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- Figure 1: UK MFIs Sterling Deposits from UK Resident Businesses, by Quarter End, 2014-15, (£ Million Outstanding of Deposit Liabilities, Excluding Under Repo, Not Seasonally Adjusted)
- Figure 2: MFI Sterling Deposits of UK Resident Non-Financial Businesses, by Industry Type, Top Eight, December 2015, (Share of Total)
Key Insights
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- Which factors will most affect market development?
- Why is there a need for a new operating model in the industry?
- How are market players adopting to new technology?
Introduction
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- Definitions
- Methodology
- Abbreviations
- Market positioning
- The supplier
- The customer
UK Economy
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- Key points
- Overview
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- Figure 11: UK GDP Quarterly Development, 2004-2015, (£ Billion)
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- Figure 12: Quarters after GDP Peak, 1979, 1990 and 2008, (Number of Quarters and GDP as % of Pre-Downturn Peak)
- Inflation
- Interest rates
- House prices
- Consumer spending
- Manufacturing
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- Figure 13: UK Output, by Industry, 2008-2015, (Index: Q1 2008 = 100)
- Business investment
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- Figure 14: UK GFCF 2003-2015, (£ Million)
- Imports
- Exports
Market Factors
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- Key points
- GDP growth slows in 2015, but remains positive
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- Figure 15: GDP Growth Rate, 2012-15, (% Change on Previous Quarter)
- Figure 16: GDP Growth Rate, 2012-2015, (% Change on Previous Quarter)
- Large corporates take majority of private sector turnover
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- Figure 17: Business Population in the UK, Private Sector, by Company Size, 2013-15, (Number, £ Billion and Millions Employed)
- Profitability and business investment rising in the private sector
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- Figure 18: UK PNFCs Net Rate of Return, Q1 2010 - Q3 2015, (% Return)
- Figure 19: UK PNFCs Net Rate of Return, Q1 2010-Q3 2015, (% Return)
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- Figure 20: UK Total Business Investment, 2011 -15, (Chained Volume Measures and Not Seasonally-Adjusted, £ Billion and % Annual Change)
- Figure 21: UK Total Business Investment, 2011-15, (Chained Volume Measures and Not Seasonally-Adjusted, £ Billion)
- Continued struggles by mainstream lenders to provide finance to SMEs and legislative changes have piqued alternative lenders’ interest
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- Figure 22: Company Insolvencies in England and Wales, 2011-15, (Number and % Annual Change)
- Figure 23: Company Insolvencies in England and Wales, 2011-15, (Number)
- Reports of positive business confidence at odds with decline in M&A activity
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- Figure 24: Mergers and Acquisitions of UK Companies, 2010 -2015*, (Units)
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- Figure 25: Mergers and Acquisitions of UK Companies, 2010-2015*, (Units)
- FCA launches study into investment and corporate banking
Commercial Banking Market
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- Key points
- The wider banking industry was under pressure in 2015
- Although there were some positive results from banks’ commercial business operations
- Commercial deposits from financial businesses fall in line with marginal fall in economic growth in 2015
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- Figure 26: UK MFIs Sterling Deposits from UK Resident Businesses, 2014-15, (£ Million Outstanding of Deposit Liabilities, Excluding Under Repo, Not Seasonally Adjusted)
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- Figure 27: UK MFIs Sterling Deposits from UK Resident Businesses, by Quarter End, 2014-15, (£ Million Outstanding of Deposit Liabilities, Excluding Under Repo, Not Seasonally Adjusted)
- Figure 28: Aggregate Balances of the MBBGs Deposits, 2012-14, (£ Billion)
- Market segmentation
- Professional, scientific and technical activities continue to account for largest share of NFB deposits
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- Figure 29: MFI Sterling Deposits of UK Resident Non-Financial Businesses, by Industry Type, December 2015, (Share of Total)
- Figure 30: MFI Sterling Deposits of UK Resident Non-Financial Businesses, by Industry Type, Top Eight, December 2015, (Share of Total)
- SME sector performing strongly in wider recovery
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- Figure 31: MBBG Deposits of Small and Medium-Sized Businesses, 2011-15, (£ Billion)
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- Figure 32: MBBG Deposits of Small and Medium-Sized Businesses, 2011-15, (£ Billion)
Commercial Borrowing
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- Key points
- Net lending still requires improvement following mixed performance in 2015
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- Figure 33: UK MFIs’ Net Loans to Non-Financial Businesses, Q4 2013 - Q4 2015, by Size of Business, (£ Million, Not Seasonally Adjusted)
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- Figure 34: UK MFIs’ Net Loans to Non-Financial Businesses, Q4 2013 - Q4 2015, by Size of Business, (£ Million, Not Seasonally Adjusted)
- The Funding for Lending scheme is now focused on small business finance
- Rates remain low for commercial lending
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- Figure 35: Average Interest Rate for UK MFI New Advances to PNFCs, at December in 2011-2015, (% Not Seasonally Adjusted)
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- Figure 36: Average Interest Rate for UK MFI New Advances to PNFCs, at December 2011-15, (% Not Seasonally Adjusted)
- Demand for credit from medium and large corporates still rising
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- Figure 37: Availability of Corporate Credit to PNFCs in the Last Three Months, Q1 2010 - Q4 2015, (Net Percentage Balance)
- Figure 38: Availability of Corporate Credit to PNFCs in the Last Three Months, Q1 2010 - Q4 2015, by Business Size, (Net Percentage Balance)
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- Figure 39: Demand for Corporate Credit by PNFCs in the Last Three Months, Q1 2010 - Q4 2015, (Net Percentage Balance)
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- Figure 40: Demand for Corporate Credit to PNFCs in the Last Three Months, Q1 2010 - Q4 2015, by Business Size, (Net Percentage Balance)
Market Trends
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- Key points
- Increasing competition leading to the development of a new service model
- Commercial banking undergoing initial digitisation process
- Challenger banks switching focus to business finance and loans
- High take up for online business banking facilities
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- Figure 41: Use of Business Banking Features in the Last Three Months, March 2015
- Business confidence has remained positive since 2012 and has influenced demand in the industry
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- Figure 42: Business Confidence Index, per Half-Year, 2005-2015, (Index Figure)
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- Figure 43: Business Confidence Index, per Half-Year, 2005-2015, (Index Figure)
- Write offs on loans to non-financial companies have fallen since 2011
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- Figure 44: Write Offs of Loans to PNFCs from Banks and Building Societies, 2010-14, (£ Million, Not Seasonally Adjusted and % Annual Change)
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- Figure 45: Write Offs to Loans to PNFCs from Banks and Building Societies, 2010-15, (£ Million, Not Seasonally Adjusted)
Brand Communication and Promotion
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- Key points
- Ad spend declines for first time since 2012
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- Figure 46: Advertising Expenditure on Business Banking Services, 2011-15, (£ 000)
- Figure 47: Advertising Expenditure on Business Banking Services, 2011-15, (% of Total Ad Spend)
- Lloyds maintains position as largest campaign spender
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- Figure 48: Advertising Expenditure on Business Banking Services, by Advertiser, 2011-2015, (£ 000)
- Figure 49: Advertising Expenditure on Business Banking Services, by Advertiser, 2011-15, (% of Total Ad Spend)
- Press dominates total advertising spend for business banking services
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- Figure 50: Advertising Expenditure on Business Banking Services, by Media Type, 2011-2015, (£ 000)
- Figure 51: Advertising Expenditure on Business Banking Services, by Media Type, 2011-15, (% Share)
Industry Structure
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- Key points
- Industry development
- Challenger banks on the rise, but still can’t compete with existing major groups
- The number of banks and building societies has remained largely unchanged since 2013
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- Figure 52: Number of Banks and Building Societies Operating in the UK, 2013-2015, (Number)
- Figure 53: Number of Banks and Building Societies Operating in the UK, 2013-15, (Number)
- Government scaling back its involvement in the banking sector
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- Figure 54: Cost to UK Government of Financial Interventions in Banking Sector, November 2015, (£ Billion)
Company Profiles
Aldermore Bank
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- Figure 55: Financial Analysis of Aldermore Bank plc, 2010-14, (£ Million)
- Company strategy
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Barclays PLC
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- Figure 56: Financial Analysis of Barclays plc, 2011-15, (£ Million)
- Company strategy
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Clydesdale Bank PLC
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- Figure 57: Financial Analysis of Clydesdale Bank plc, 201115, (£ Million)
- Company strategy
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Co-operative Bank
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- Figure 58: Financial Analysis of Co-operative Bank plc, 2010-14, (£ Million)
- Company strategy
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HSBC
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- Figure 59: Financial Analysis of HSBC Bank, 2010-14, (£ Million)
- Company strategy
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Lloyds Banking Group
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- Figure 60: Financial Analysis of Lloyds Banking Group, 2011-15, (£ Million)
- Company strategy
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Royal Bank of Scotland Group
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- Figure 61: Financial Analysis of RBS Group, 2011-15, (£ Million)
- Company strategy
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Santander UK PLC
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- Figure 62: Financial Analysis of Santander UK plc, 2011-15, (£ Million)
- Company strategy
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- Figure 63: Profiled Companies’ Combined Income, 2010-2014, (£ Million)
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Commercial Banking Forecast
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- Key points
- Global economic factors and EU referendum will influence deposit levels
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- Figure 64: Forecast UK MFIs Sterling Deposits from UK Resident Non-Financial Corporations, 2016-2020, (£ Billion at 2015 prices, % Annual Change)
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- Figure 65: Forecast UK MFIs Sterling Deposits from UK Resident Non-Financial Corporations, 2016-2020, (£ Billion at 2015 prices)
- Increasing amount of regulatory measures threatening UK’s leading position
- Changes to operating model are required as new banks push towards a more digitalised environment
Further Sources and Contacts
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- Trade associations
- Trade magazines
- Trade exhibitions
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