DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
The consumer credit market performed better than anticipated in 2009 2
Consumer credit gross lending has been in decline since 2004 2
All consumer credit lines saw a slump in 2009 3
Credit card gross lending has a larger share of total lending while unsecured personal loans have lost share 4
The consumer credit market was impacted by the deteriorating state of the UK economy 5
The Bank of England adopted a program of quantitative easing in order to stimulate the economy 5
Lenders have reduced the amount they advance to borrowers despite efforts by the government 6
Consumers revised their usage of credit products as the recession deepened 8
Consumers are more concerned about credit cards than their overdraft or repayment of other loans 9
There was a return to savings as consumers shied away from debt 10
The Financial Services Authority banned single premium PPI at the point of sale 10
There are a number of key trends in the market which will continue to have an impact in 2010 11
The margin between the base rate and the typical APR on credit products is likely to decrease 11
Write-offs on credit cards rose dramatically in the third quarter of 2009 11
Default rates in unsecured lending are beginning to drop across the board 12
The use of ATMs for taking cash out on credit cards continues to decline 13
Debit cards are continuing to outperform credit cards in terms of transactions 13
Overdraft borrowing is in decline as consumers pay off their outstanding overdraft balances 14
Some retailers may completely drop store cards in favor of credit cards 15
Motor finance fraud has been on the rise 16
New regulatory developments are set to have an important impact on the consumer credit market 16
New regulation in the cards market will alter the dynamics of the market 16
There may be a move to online applications for store cards 17
Firms that promise they can write-off consumer debts are facing a crackdown 18
The Financial Services Bill has been rushed through in the 'wash up' before the election 18
The FLA has set up a website to help consumers to understand the different types of finance available 18
Datamonitor forecasts the market to show a gradual improvement from the end of 2010 19
Datamonitor's forecasting model explained 19
Datamonitor's view is that the economy will grow slowly in 2010 20
Unemployment is expected to rise but the overall magnitude has been revised downwards 20
GDP is expected to grow moderately in 2010 before picking up during the remainder of the forecast period 20
The Bank of England's base rate is expected to rise slightly by the end of the year 20
House prices will remain fairly static in 2010 21
New car registrations and new car prices 21
Used car sales are expected to decline further in 2010 21
Datamonitor expects the consumer credit market to be flat in 2010 22
Most product lines are expected to perform better over the next five years than over the past five 24
Datamonitor has considered two additional scenarios 25
Under Datamonitor's optimistic scenario, the consumer credit market will see robust performance over the forecast period 25
The pessimistic scenario will see a subdued consumer credit market over the next couple of years 26
APPENDIX 28
Supplementary data 28
Definitions 35
Bank of England base rate 35
Balances outstanding 35
CAGR 35
Consumer credit 36
Gross advances 36
Overdraft 36
Methodology 36
Forecasting methodology 36
Choice of economic variables 36
Model outputs 37
Bespoke scenario-based forecasting 37
Further reading 37
Ask the analyst 37
Datamonitor consulting 37
Disclaimer 37
List of Tables
Table 1: Gross lending and balances outstanding, £m, 2003-09 3
Table 2: Datamonitor's updated macroeconomic variables for 2009-14: Datamonitor view 22
Table 3: Updated Datamonitor view: consumer credit forecast, by product line, 2009-14 (£ billion) 23
Table 4: Datamonitor's updated optimistic consumer credit forecast, by product line, 2009-14 (£ billion) 25
Table 5: Datamonitor's updated pessimistic consumer credit forecast, by product line, 2009-14 (£ billion) 26
Table 6: Share of total consumer credit market for different credit products, 2003-09 28
Table 7: Gross lending levels among consumer credit providers (£m), Q1 2005-Q4 2009 29
Table 8: Average APR on different consumer credit products, March 2008-February 2010 30
Table 9: Net balances of household demand for consumer credit products, Q2 2008-Q1 2010 31
Table 10: Level of concern regarding different financial services products 31
Table 11: Year-on-year growth in insolvencies, write-offs and unemployment, Q1 2005-Q4 2009 32
Table 12: Net balances of household default levels on consumer credit products, Q2 2008-Q1 2010 32
Table 13: Credit card activity, split by type, 2005-09 33
Table 14: Value of credit and debit transactions and change over previous year, Q1 2006-Q4 2009 33
Table 15: Change in overdraft lending, March 2008-February 2010 34
Table 16: Comparison of compound annual growth rates for different credit products, 2005-09 & 2010f-14f 34
Table 17: Datamonitor's updated macroeconomic variables for 2009-14: optimistic scenario 34
Table 18: Datamonitor's updated macroeconomic variables for 2009-14: pessimistic scenario 35
List of Figures
Figure 1: Gross lending has declined since 2004 but balances outstanding only started to decline in 2009 2
Figure 2: Credit cards lending has built up a much larger share of the overall consumer credit market 5
Figure 3: Building society lending dropped significantly in Q1 2008 7
Figure 4: Unsecured personal loans have seen the largest increase in APRs since March 2008 8
Figure 5: Household demand for unsecured lending products has fallen away 9
Figure 6: Consumers were more concerned about credit card debt than loan repayments 10
Figure 7: Credit card write-offs have been an area of concern and will need to be monitored carefully 11
Figure 8: Default rates on credit cards have lagged behind other unsecured lending defaults 12
Figure 9: Cash withdrawals have declined as a percentage of credit card activity 13
Figure 10: The gap between credit and debit is growing as credit declines while debit continues to grow 14
Figure 11: Following a period of growth, overdraft balances are in decline 15
Figure 12: The FLA's car finance website gives consumers a better idea of what they should expect to pay 19
Figure 13: Unsecured personal loans will experience the fastest compound annual growth rate 24
[Inhaltsverzeichnis ausblenden]
