Construction and property lead demand for bank lending

Demand for bank finance from construction and property companies has outstripped other sectors according to latest statistics from the British Bankers&#39 Association (BBA).

The BBA&#39s annual review, Banking Business, shows that the pattern of demand from companies for bank finance has shifted in recent years, with lending to construction and property companies more than doubling over the last five years, while lending to manufacturers, wholesalers and retailers saw little change.

Demand for bank finance from small businesses has changed pattern too. Overdraft borrowing has decreased as small businesses choose to structure their finance through term loans, but the BBA figures show that small businesses are also holding higher deposits.

The research shows that Britain&#39s banking sector, with assets of over €5,000bn (£3,145bn) – a fifth of all European banking assets – is bigger than the commercial banking sector in any other European country.

Britain is also the largest centre in the world for cross-border bank lending, accounting for 21% cent of the world total. Earnings from services and investments by the sector contributed around £12bn to the UK&#39s balance of payments – 40% of the net overseas earning of the whole financial services sector.