It's not just the Funding for Lending programme that slumped. A KPMG report published today shows that banks have reduced lending by £364 billion in the past five years.
In a report titled 'Bank to the Future', the big accountancy firm argues that banks are missing out on opportunities to put money in a quickly-recovering British economy.
"Overall loans and advances have reduced significantly by £364.7 billion or 14 per cent to £2,334 billion in the first half of 2014, with customer lending accounting for £309.0 billion of the decrease," it says.
The report argues that the steep decline in lending was a direct result of redress procedures after various acts of crisis-inducing malfeasance around 2008, and that banks are now risk-shy due to bad publicity and expensive customer remediation.
KPMG's Bill Michael, EMA Head of Financial Services, warns that the newly-developed market of alternative finance which filled the lending gap poses a threat to banks: “Shadow banking initiatives are increasingly penetrating under-served areas of the market. These initiatives are creating a challenging environment that traditional banks are unfamiliar with."
Leave a comment