View more on these topics

We need to solve the lending conundrum

CHRISTOPHER TAYLOR, CHIEF EXECUTIVE OFFICER, LONDON & EUROPEAN
CHRISTOPHER TAYLOR, CHIEF EXECUTIVE OFFICER, LONDON & EUROPEAN

Do you feel £2.7bn better off thanks to Lloyds Banking Group and the Royal Bank of Scotland? Or is your business like a rock on a roll? I do love headlines in the Sun.

Reports from the banking community unveiling outstanding profits may have lifted the stock markets, but I doubt it lifted many spirits among taxpayers.

Not that I’m knocking the return to profitability of Lloyds and RBS. As shareholders, we want to see a return on the investments the previous government made but banks need to support the recovery and the jury is out on whether they are lending where it matters.

Lloyds group says it has made almost £15bn available in new mortgage loans and £5.7bn to small businesses. BBC business editor Robert Peston estimates its total net loans have dropped 1% and it is charging more for that credit relative to what it pays for funds.

At the same time, borrowers concerned over job security are repaying debt as fast as they can.

The result is flat net lending figures. And here’s the conundrum – to lend more, banks have to relax their view on the credit worthiness of borrowers yet the build-up of excessive credit enabled by irresponsible lending is partly to blame for getting us into recession.

No-one wants a return to those days and we need to achieve a realistic level of credit. But banks must lend to future wealth makers as the private sector will have to mop up jobs from public sector cuts, and we need people in jobs so we don’t spiral back into recession.

Recommended

DAVE PINNINGTON, BUSINESS DEVELOPMENT DIRECTOR, V LOANS

Specialist firms are a safe pair of hands

One of the evolutionary steps that has changed the business-to-business part of the market has been the decision by specialist service providers to diversify. Packagers and other providers to the intermediary market have morphed into providing debt management, secured loans, payment protection insurance claims and protection products, as well as their core propositions. This ability […]

RAY BOULGER, BROKER PROC, FEES WILL VARY

Outsourcing affordability checks may create two-tier proc fee model

Industry expert Ray Boulger has warned that a two-tier system of brokers may be created if lenders outsource affordability checks to them. Ray Boulger, senior technical manager at John Charcol, says different proc fees may apply to brokers who are trusted by lenders and those who are not. In a feature for Mortgage Strategy TV […]

Singapore cover image - thumbnail

White paper — Singapore International Insights

Jelf Employee Benefits assesses key trends within the international private medical insurance provision of organisations with employees in Singapore. Benefit structure, cost management and healthcare facilities are examined and key considerations are highlighted. This edition will be of particular interest to global human resource directors and benefit managers with local and expatriate populations in Singapore.

Newsletter

News and expert analysis straight to your inbox

Sign up