Losing interest: Rises in the official bank rate are expected to restrict future demand

Over the past five years, increases in retail lending activity, prompted by an upturn in the housing market, have supported growth in the industry. The flow of credit available to banks also improved. Industry revenue is expected to increase at a compound annual rate of 4.8% over the five years through 2017-18. However, business lending activity fell during the first three years of period, which constrained growth. Tight regulations and strict lending criteria also restricted lending activity and curtailed expansion. In addition, the low interest rate environment curbed industry growth.Industry expansion slowed in 2016-17 as economic uncertainty following the EU referendum and the hike in stamp duty payable on buy-to-let and second homes adversely affected the housing market...read more.

Industry Statistics & Market Size
Revenue
£126.3bn
Annual Growth 13-18
4.8%
Forecast Growth 18-23
Profit
Employment
326,096
Businesses
329

Industry Threats & Opportunities

  • Regulations and strict lending criteria have constrained expansion over the past five years
  • The Funding for Lending scheme is expected to have restricted the decline in business lending
  • The abolishment of stamp duty on for first-time buyers is anticipated to support lending activity
  • Industry Report - Industry Locations Chapter

    The geographic spread of revenue in the industry closely follows that of population and economic activity. Because nearly all consumers and businesses use banking services frequently, the correlation with both the distribution of the population and economic activity is strong. Differing income levels and types of businesses across the different regions of the United Kingdom also affect the distribution of establishments in the industry.LondonThe average income is relatively high in London and this often translates into greater revenue for banks, because people with higher incomes can take out larger loans and pay more interest. Higher property prices also contribute, with larger loans required to purchase a house meaning more interest is paid. Lon...purchase to read more.

    Additional Insights for the Banks Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Banks Industry are

  • Superior financial management and debt management
  • Access to secure revenues
  • Having a good reputation
  • IBISWorld analysts also discuss how external factors such as Business capital expenditure and Business confidence index in the Banks industry impact industry performance..

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    What's in this report

    What is the Banks Industry?

    The Banks industry covers the retail and commercial banking activities of deposit-taking institutions. Retail and commercial banks accept deposits from and make loans to individuals and businesses.

    Industry Products
  • Business loans
  • Home loans
  • Personal loans
  • Bank accounts
  • Industry Activities
  • Lending to businesses
  • Lending to individuals
  • Accepting deposits
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Business capital expenditure
  • Business confidence index
  • Number of residential property transactions
  • Ratio of household debt to disposable income
  • Official bank rate

  • Current Performance
  • Crisis recovery
  • Industry expansion
  • Regulations intensify
  • Job cuts
  • Chart: Revenue Growth

  • Industry Outlook
  • Demand expands
  • Regulations rise
  • Margins improve
  • Table: Banks Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Banks Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumer Electronics Manufacturing
  • Building Project Development
  • Investment Banking & Securities Brokerage
  • Consumers

  • Key Selling Industries
  • Central Banking
  • Renting and Operating of Own or Leased Real Estate

  • Products & Services
  • Business loans
  • Home loans
  • Personal loans
  • Bank accounts
  • Chart: Banks Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Businesses
  • Individuals
  • Other
  • Chart: Major Market Segmentation for the Banks Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitInterestLoan losses and provisionsWagesOther costs
  • Chart: Cost Structure Benchmarking – Sector vs Banks

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Banks Industry

  • Industry Globalization
    Lloyds Banking Group plc, The Royal Bank of Scotland Group plc, Barclays plc, HSBC Holdings plc,
  • Table: Lloyds Banking Group plc - financial performance
  • Table: The Royal Bank of Scotland Group plc - financial performance
  • Table: Barclays plc - financial performance
  • Table: HSBC Holdings plc - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Banks Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Banks Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Net Interest Margin
  • A measure of the difference between the interest income generated by banks and the amount of interest paid out to their lenders.
  • Ring-Fencing
  • Ring-fencing occurs when a portion of a bank's business are financially separated.
  • Wholesale Funding
  • Funding supplied to banks by other financial institutions.
  • What Our Customers Say

    Why buy this report?

    The Banks market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Banks:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Banks market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Banks, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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