Research and Markets: UK Personal Lending 2010: Competitive Dynamics in the UK Unsecured Lending Market

Research and Markets (http://www.researchandmarkets.com/research/45836f/uk_personal_lendin) has announced the addition of the "UK Personal Lending 2010: Competitive Dynamics in the UK Unsecured Lending Market" report to their offering.

Competition in the unsecured personal loan market remained flat in 2009 as lenders cautiously focused their attention on selling to existing customers. There were minor competitive developments but the overriding focus of lenders was ensuring that bad debt levels remained under control. In addition, preparation for the implementation of new regulatory measures remains an ongoing concern.

Scope

• Provides market share data for gross advances and balances outstanding for the largest UK personal loan providers.
• Analyzes developments in the channels used to arrange a loan and considers different lender profiles in terms of borrower loan size and term.
• Includes data on advertising expenditure such as how much providers are willing to spend to promote their products and via which channels.

Highlights of this title

• Under an uncertain economic outlook, lenders have continued to focus on their core business. There is a need to find business where they can write a good margin yet avoid taking on potential bad debt. On the demand side, concern about the future is leading borrowers to postpone purchases, while on the supply side there is a liquidity drive.
• The overall level of advertising expenditure on unsecured personal loans has decreased over the last couple of years, which is consistent with the overall decrease in the level of competition from lenders pulling out and restricting lending. Advertising expenditure for unsecured personal loans has declined from 51.6m in 2007 to 18.9m in 2009.
• Borrowers with RBS tend to take out larger loans and for a longer period of time. In general the biggest players in the market have a greater proportion of large loans in their portfolio whereas the smaller lenders have a larger proportion of smaller loans and a larger share of short term loans.

Key reasons to purchase this title

• Gain an understanding of the performance of your competitors.
• Comprehend how conditions in the market are developing and what opportunities might present themselves as a result.
• Understand how the latest regulatory developments will impact on your business.

Key Topics Covered:

OUR VIEW

CATALYST

SUMMARY

ANALYSIS

• Lloyds Banking Group has the largest market share of new lending
• Lloyds Banking Group has a dominant position in the market for unsecured personal loans
• Gross advances in unsecured personal loans have declined since prior to 2005
• Although competitive pressure is weak, elements of competition remain in the market
• Some of the best rates in the market are only available to existing customers
• First Direct's and M&S Money's cashback offers set them aside from most other providers
• Sainsbury's Finance and the Co-operative Bank are offering points on membership cards
• Lenders are shying away from the mainstream market at the moment
• Lender websites are reflecting a return to a greater degree of competition
• Lending Wizard uses soft search techniques as a key way to attract customers
• Peer-to-peer lending is being challenged by social networking lending
• Advertising expenditure grew in 2009 for the largest providers although it remained down on 2007 levels
• Direct mail remained the largest advertising channel for unsecured personal loans
• Competition is unlikely to improve significantly for another year
• Renewed focus on face-to-face reflects lenders' focus on existing customers
• Aggregator websites continue to play a role in unsecured personal lending
• Aggregators are seen as a key channel for acquiring customers in the future
• The branch maintains its place as an important area for face-to-face transactions
• The popularity of the phone as a channel of arrangement is likely to have peaked
• The intermediary channel is unpopular and is expected to remain this way as the market recovers
• Borrowers tend to take out loans for a longer period with RBS and Northern Rock
• Borrowers are more likely to take out a small loan with NatWest and a large loan with Northern Rock
• RBS has the largest customer base in social grades A to C1
• NatWest and RBS have the largest proportion of business from under 35 year olds
• Lenders face various hurdles such as regulation which are subduing competitive pressure
• The level of write-offs in unsecured personal lending dropped below credit cards in Q1 2010
• The Consumer Credit Directive could have a big impact on the market
• The introduction of full or early repayments will result in quite a technical change for lenders
• The OFT has decided not to cap interest payments on payday loans, which will avoid market distortions

APPENDIX

CAGR

For more information visit http://www.researchandmarkets.com/research/45836f/uk_personal_lendin

Source: Datamonitor