| MP65363 |
| MAPS : Personal Loans: December 2003 |
|
Our price £775 plus VAT |
CLICK
 TO BUY |
This report covers: personal loans, mainstream loans, car loans, loans for the poor, commercial lenders, credit unions, catalogue loans, loans for the self-employed, tied loans, supermarket loans,
companies covered include: Egg, The Woolwich, Sainsbury's Bank, Abbey National, Alliance & Leicester, Barclays, HBOS, HSBC Holdings, Lloyds TSB, Northern Rock, Royal Bank of Scotland, Virgin Money,
EXECUTIVE SUMMARY
| Executive Summary |
| LOANS INFLATION |
| People borrowed more in 2002 than in 2001, and advances have continued to grow in 2003. In July 2003, total lending to the UK private sector was £12.2bn. This figure was above the previous month's figure of £4.5bn, and larger than the recent monthly average of £9.1bn. |
| SCOTTISH STRENGTH |
| Royal Bank of Scotland (RBS) continues to dominate personal loans through its many strongly branded businesses, such as Direct Line, National Westminster (NatWest), Lombard Direct and RBS' own loans business. In addition, RBS is in partnership with Tesco Personal Finance and supplies Virgin Money. |
| Marketing effort is increasingly pitched to direct sales from the loan suppliers themselves and from brokers, but the large banks promote their ability to offer customers a choice. Of all the high-street banks, Barclays is the most committed to a single brand name for products delivered though a variety of channels. Brokers increasingly specialise in borrowers who fail automated credit scoring. |
| BIGGER SQUEEZE ON INCOMES |
| In coming years, people will experience a greater squeeze on their finances in their prime earning years. The demands of a mortgage, life insurance, pension contributions, health insurance and children's higher education will increasingly restrict disposable incomes and thus the potential for loan repayments. It will be increasingly important for lenders to understand the psychological profiles of their loan customers and potential customers. |
| The prime market for loans is, and will remain, the nine million households, approximately, with two non-retired adults with and without children and single people of working age, living on their own or as a member of a household headed by someone else. |
| DOWNWARD SHIFT IN LOANHOLDERS' PROFILE |
| In the years to 2008, it is likely that credit cards will take market share from structured personal loans for amounts of up to around £5,000. Low-income borrowers, who are unattractive to the card issuers, will continue to seek loans, often through brokers and frequently at less than favourable rates. For home buyers and owners, flexible mortgages secured on the value of their property are more economic than personal loans as a means of raising cash, because repayments are at mortgage rates even for small additional loans. The profile of personal-loan holders will shift down the socio-economic and income scales, towards borrowers with poor credit ratings. |
| FORECASTS FOR 2008 |
| There are a considerable number of variables that affect the loans market, and it is almost impossible to forecast what will happen with any large degree of certainty. However, Key Note expects gross lending in 2008 to be worth between £96bn and £130bn at 2003 prices, depending on the choice of a moderately pessimistic or moderately optimistic scenario for the sector. Certainly, the current rate of growth has been more fitful than it was at the beginning of this century, but the banks seem confident that, although house prices will slow and interest levels will remain low, the economy is unlikely to slip back into boom or bust, and thus demand for personal loans will stay reasonably high, although with a low growth rate. |
TABLE OF CONTENTS
| Executive Summary |
| LOANS INFLATION |
| SCOTTISH STRENGTH |
| BIGGER SQUEEZE ON INCOMES |
| DOWNWARD SHIFT IN LOANHOLDERS' PROFILE |
| FORECASTS FOR 2008 |
| 1. Introduction |
| THE TOPIC |
| OBJECTIVES |
| METHODOLOGY |
| Original Research |
| Problems in the Research Process |
| DEFINITION |
| 2. Strategic Overview |
| MARKET DYNAMICS |
| The Market for Personal Loans |
| Mainstream Loans |
| Car Loans |
| Loans for the Poor |
| Commercial Lenders |
| Credit Unions |
| Loans for the Self-Employed |
| Table 1: Number of Employees in the UK (000), February to April 2001 to February to April 2003 |
| Not-for-Profit Organisations |
| Tied Loans |
| PERSONAL LOANS IN AUTUMN 2003 |
| Table 2: Net Borrowing by Consumers in Real Terms† (£bn at 2001 prices), 1996-2002 |
| Loans of £500 and £1,000 |
| Loans of £5,000 and £10,000 |
| Loans of £20,000 |
| Old and New Lenders in Interest Rate Competition |
| Table 3: Sample APRs for Unsecured Loans of £1,000 and £10,000 (%), 24th June 2003 |
| Consumer Credit |
| Table 4: Consumer Credit (£m), 1996-2001 |
| Table 5: Total Lending to Individuals (£m and %), October 2002 to October 2003 |
| DISTRIBUTION |
| Choice of Distribution Channels |
| Brokers Cater for Subprime Borrowers |
| COMPETITIVE STRUCTURE |
| Leading Lenders |
| Straightforward Personal Loans from Banks and Building Societies |
| All-in-One Mortgages and Personal Loans |
| Egg, The Woolwich and The One Account |
| Supermarket Loans |
| Tesco Personal Finance |
| Table 6: A Comparison of Tesco Loans of £7,500 Paid Back Over 5 Years With Other Selected Lenders (% and £), December 2003 |
| Sainsbury's Bank |
| Table 7: A Comparison of Sainsbury's Bank Loans of £7,500 Paid Back Over 5 Years With Other Selected Lenders (% and £), 2003 |
| High-Street Branches in Supermarkets |
| Catalogue Loans |
| Other Loans |
| ADVERTISING |
| Main Media Advertising |
| Prime Targets |
| THE CONSUMER |
| MARKET FORECASTS |
| 3. Demographic Influences |
| BACKGROUND |
| POPULATION TRENDS |
| The UK Population |
| Table 8: The UK Population by Age Group (%), 1961, 1994 and 2031 |
| Table 9: UK Dependant Population by Age† (million), 1971-2023 |
| Banks Deny Older People Credit |
| HOUSEHOLD TRENDS |
| Table 10: Number of Households in Great Britain (million and number), 1971, 1981, 1991 and 2002 |
| Table 11: Families with Dependant Children† in Great Britain by Family Type and Marital Status (% and 000), 1985-2001 |
| CONSUMER TRENDS |
| 4. Marketing Trends |
| ADVERTISING AND PROMOTION |
| Advertisements in Traditional Media |
| Table 12: Main Media Advertising Expenditure on Major Personal-Loan Products (£000), Year Ending June 2003 |
| Advertisements in New Media |
| Direct Marketing |
| Table 13: UK Direct Mail Volumes by Type (million items), 1990-2002 |
| Table 14: Business-to-Business Response Rates to Direct Marketing by Sector (number and %), 2003 |
| Point of Sale |
| MARKETING |
| Loyalty Rewards |
| Retail Ambience |
| Distribution |
| 5. An International Perspective |
| MARKET DEVELOPMENTS |
| COMPETITIVE ENVIRONMENT |
| CONSUMER BEHAVIOUR |
| 6. PEST Analysis |
| POLITICAL FACTORS |
| Regulation |
| Overindebtedness |
| ECONOMIC FACTORS |
| The UK Economy |
| Table 15: Key UK Forecasts (%, million and £bn), 2003-2006 |
| Weekly Household Expenditure by Income Group |
| Table 16: Weekly Household Expenditure in the UK on Loans to Clear Other Debts by Income Group (£ per week and %), 2000/2001 |
| Weekly Household Expenditure by Age |
| Table 17: Weekly Household Expenditure in the UK on Loans to Clear Other Debts by Age of Head of Household (£ per week and %), 2000/2001 |
| Weekly Household Expenditure by Region |
| Table 18: Weekly Household Expenditure in the UK on Loans to Clear Other Debts by Region (£ per week and %), 2000/2001 |
| Consumer Credit |
| Table 19: Consumer Credit Net Lending in the UK (£m and index 1998=100), 1998-2002 |
| SOCIAL FACTORS |
| TECHNOLOGICAL FACTORS |
| 7. Consumer Dynamics |
| OVERVIEW |
| Table 20: Summary of Results (% of respondents), 2003 |
| SURVEY RESULTS |
| "I Have One Personal Loan Now" |
| "I Have More Than One Personal Loan" |
| Table 21: Current Personal Loans (% of respondents), 2003 |
| "I Have Had A Personal Loan In The Past" |
| "I Intend To Apply For A Personal Loan Within The Next 12 Months" |
| Table 22: Past Use of and Future Interest in Personal Loans (% of respondents), 2003 |
| "If I Need A Loan, A Relative Or Friend Would Supply One" |
| "I Prefer To Save Up Before Buying A Big Item Instead Of Taking Out A Personal Loan" |
| Table 23: Loans from Relatives and Friends and Avoiding Loans Altogether (% of respondents), 2003 |
| "I Have Already Or Would Take Out Insurance To Cover Personal-Loan Repayments In The Event Of Being Ill Or Unemployed" |
| "I Compare The Terms Of Several Loans Before Deciding Which One To Apply For" |
| Table 24: Attitudes Towards Loan Insurance and Loan Terms (% of respondents), 2003 |
| "I Have Taken Out A Personal Loan Over The Telephone" |
| "I Have Taken Out A Personal Loan Over The Internet" |
| Table 25: Arranging Loans Over the Telephone and the Internet (% of respondents), 2003 |
| "I Would Take Out A Personal Loan Over The Internet" |
| "I Use One Or More Credit Cards" |
| Table 26: Intention to Take Out an Internet Loan and Use of Credit Cards (% of respondents), 2003 |
| "I Have A Mortgage Or Fully Own My Own Home" |
| "A Low Interest Rate Would Be The Most Important Factor If I Were Looking For A Personal Loan" |
| Table 27: Home Ownership and the Importance of a Low Interest Rate (% of respondents), 2003 |
| "The Lender's Reputation Would Be The Most Important Factor If I Were Looking For A Personal Loan" |
| Table 28: The Importance of a Lender's Reputation (% of respondents), 2003 |
| 8. Company Profiles |
| ABBEY NATIONAL PLC |
| Corporate Strategy |
| Distribution |
| Advertising |
| Profitability |
| Table 29: Financial Results for Abbey National PLC (£m), Years Ending 31st December 2000-2002 |
| Future Company Developments |
| ALLIANCE & LEICESTER PLC |
| Corporate Strategy |
| Distribution |
| Advertising |
| Profitability |
| Table 30: Financial Results for Alliance & Leicester PLC (£m), Years Ending 31st December 2000-2002 |
| Future Company Developments |
| BARCLAYS PLC |
| Corporate Strategy |
| Distribution |
| Advertising |
| Profitability |
| Table 31: Financial Results for Barclays PLC (£m), Years Ending 31st December 2000-2002 |
| Future Company Developments |
| HBOS PLC |
| Corporate Strategy |
| Distribution |
| Advertising |
| Profitability |
| Table 32: Financial Results for HBOS PLC (£m), Years Ending 31st December 2001 and 2002 |
| Future Company Developments |
| HSBC HOLDINGS PLC |
| Corporate Strategy |
| Distribution |
| Profitability |
| Table 33: Financial Results for HSBC Holdings PLC ($m), Years Ending 31st December 2000-2002 |
| Future Company Developments |
| LLOYDS TSB GROUP PLC |
| Corporate Strategy |
| Distribution |
| Advertising |
| Profitability |
| Table 34: Financial Results for Lloyds TSB Group PLC (£m), Years Ending 31st December 2000-2002 |
| Future Company Developments |
| NORTHERN ROCK PLC |
| Corporate Strategy |
| Distribution |
| Advertising |
| Profitability |
| Table 35: Financial Results for Northern Rock PLC (£m), Years Ending 31st December 2000-2002 |
| Future Company Developments |
| THE ROYAL BANK OF SCOTLAND GROUP PLC |
| Corporate Strategy |
| Advertising |
| Distribution |
| Profitability |
| Table 36: Financial Results for The Royal Bank of Scotland Group PLC (£m), Years Ending 31st December 2000-2002 |
| Future Company Developments |
| OTHER COMPANIES |
| Marks and Spencer Financial Services |
| Corporate Strategy |
| Future Company Developments |
| Sainsbury's Bank |
| Corporate Strategy |
| Future Company Developments |
| Virgin Money |
| Corporate Strategy |
| Future Company Developments |
| 9. The Future |
| EXTERNAL INFLUENCES: PRESSURES ON INCOMES |
| Sound UK Economy |
| Finances Under Pressure |
| Debt Management and the Pressure for Social Lending |
| More Older Borrowers |
| Inflation and Population Forecasts |
| Table 37: Forecast Increase in UK Retail Price Index (% and index 2001/2002=100), 2001/2002-2006/2007 |
| Savings and their Impact on Loans |
| Table 38: Households in Great Britain with Savings by Economic Status (% and million), 2000/2001 |
| MARKET FORECASTS |
| 10. Further Sources |
| Associations |
| Publications |
| General Sources |
| Bonnier Information Sources |
| Government Sources |
| Other Sources |
Text © 2003 Key Note
| Can't find what you
need? Try our "Research on Request" market report service and define your own report research! Fixed prices - £150, £450 and £1,250 - and fixed delivery of 4, 5 and 14 days |
| Click here for full details |
Ariadne - working together with our customers
to enhance productivity and increase knowledge
© 2004
www.the-list.co.uk Ariadne
Last updated by Amanda Porteous 2003
