Personal Lending: Successful Entry Strategies in Western Europe

Table of Contents

• DATAMONITOR VIEW
  • CATALYST
  • SUMMARY
• ANALYSIS
  • Lenders are increasingly coming up against a saturated UK consumer credit market
    • The UK consumer credit market is contracting
    • The UK consumer credit market is also highly competitive
      • Unsurprisingly, lenders' margins are falling in the saturated consumer credit market
  • Indeed, the UK consumer credit market is the most mature of all of Western Europe
    • Consumer credit plays a more important role in the UK economy than it does in any other Western European market
    • Moreover, in terms of new lending, the UK has performed poorly in comparison to the majority of the Western European markets
  • Consequently, UK lenders should look into higher growth European markets to expand
    • A number of international players have further expanded their operations in Western Europe
  • In particular, there remain opportunities in the Spanish consumer credit market
    • The Spanish consumer credit market continues to expand
      • A number of foreign lenders have become involved
      • The market continues to hold potential
    • As an example, Barclaycard is taking advantage of this growing market
      • Barclaycard is growing successfully in Spain
      • Barclaycard entered the Spanish market directly
      • Barclaycard' s product range is designed to appeal to a range of customer segments
      • Barclaycard is likely to expand further in Spain by offering a wider range of products
  • In addition, the Turkish consumer credit market remains attractive to foreign acquisition
    • Turkey is the fastest growing consumer credit market in Western Europe
      • A number of reasons can explain Turkey' s phenomenal growth
    • A number of international players have developed a significant presence in the market
    • As an example, GE Money now has a 25.5 per cent stake in Garanti Bank
      • Garanti Bank is a major player in the Turkish consumer credit market
      • By making such an acquisition, GE Money now has claim to a growing business in this market
    • But there are inherent risks in entering such a market
• APPENDIX
  • Supplementary data
  • Definitions
    • Balances outstanding
    • CAGR
    • Consumer credit
    • Gross advances
  • Methodology
  • Further reading
    • European consumer credit reports
    • UK consumer credit reports
    • Forthcoming consumer credit briefings
  • Relevant links
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
  • List of Tables
    • Table 1: Western European markets' consumer credit balances outstanding as a proportion of their GDP, 2005
    • Table 2: Growth in consumer credit gross advances in Western European countries, 2001-2005
    • Table 3: Consumer credit gross advances in Spain, 2001-2005
    • Table 4: Number of credit cards in Spain in issue by competitor, 2005
    • Table 5: Consumer credit gross advances in Turkey, 2001-2005
  • List of Figures
    • Figure 1: The UK is the most mature of Western European consumer credit markets as a proportion of GDP, 2005
    • Figure 2: From 2001 to 2005, new lending in the UK has been slower than most European consumer credit markets, 2001-2005
    • Figure 3: Consumer credit in Spain has witnessed a solid expansion, 2001-2005
    • Figure 4: La Caixa and BBVA dominate the Spanish credit card market, but Barclaycard is now fourth in terms of number of cards in issue, 2005
    • Figure 5: Barclaycard Spain now offers a range of credit cards in order to appeal to different customer segments, October 2006
    • Figure 6: Consumer credit gross advances are rising rapidly in Turkey, 2001-2005