Table of Contents
- DATAMONITOR VIEW
- ANALYSIS
- A contracting market in 2007 saw major personal loanproviders reach
lower lending levels
- Major lenders' new personal loan business levels in 2007were below
2006 levels
- Many of the major personal loan providers also experienceda
contraction in balances outstanding in 2007
- Competitive intensity in the UK personal loan market haseased somewhat
- There are significantly fewer players now operating inthis sector
- Most lenders are focusing on their own customer databaseto sell
personal loans
- The credit crunch is forcing lenders to review theirlending
strategies
- Advertising spend has declined in 2007, as a result ofmore focus on
cross-selling
- The credit crunch is making the personal loan market lessprice
sensitive
- Personal loan providers have increased their ratesignificantly in
the space of a year
- Going forward, bad debt and PPI issues remain a threat tolenders'
profitability
- Bad debt still remains an issue for lenders, althoughlenders seem to
have learnt from their recent experience
- Nonetheless, overindebtedness continues to remain aconcern
- The future of the PPI sector is still undecided
- Personal loan providers' profitability will be adverselyaffected
- APPENDIX
- Supplementary data
- Definitions
- Balances outstanding
- Bank of England base rate
- CAGR
- Gross advances
- PPI
- Methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Unsecured personal loan gross lending for majorcompetitors,
2005-07
- Table 2: Unsecured personal loan balances outstandingand market share
for major competitors, 2006-07
- Table 3: List of unsecured personal loan providers inthe UK as per
Moneyfacts May 2008
- Table 4: Typical interest rates of major providers on a£5,000 unsecured
personal loan
- Table 5: Pricing structure for a sample of personal loanproviders
- Table 6: Gross lending market shares for major unsecuredpersonal loan
providers, 2005-07
- Table 7: Advertising spend on personal loans for majorproviders, 2006-07
- Table 8: Monthly interest rates on unsecured personalloans
- Table 9: UK banks' and building societies' write-offs onconsumer lending
- Table 10: PPI gross written premium by product line,2006
- List of Figures
- Figure 1: With the exception of Alliance &Leicester, all major
lenders witnessed a fall in business level in 2007
- Figure 2: All major providers witnessed a fall in marketshare of
personal loan balances outstanding over 2007
- Figure 3: All major personal loan providers have cutback on advertising
spend over 2007
- Figure 4: Interest rates on unsecured personal loanshave risen again in
the last couple of months despite a cut in the baserate
- Figure 5: Barclaycard and Alliance & Leicester arein Moneyfacts'
Best Buys table, May 2008
- Figure 6: Write-offs on unsecured lending other thancredit cards fell
slightly in 2007
- Figure 7: The average unsecured consumer debt per UKadult increased
further in 2007
- Figure 8: Lloyds TSB and RBS Group stand to lose themost with the CC' s
investigation of the PPI sector
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