UK Loan Volumes & Banks

UK Loan Volume (in GBP billion) Q3 ’20 volume decreases from Q2, yearly total remains far above 2019

Bank CDS spreads CDS spreads recover to pre COVID-19 levels

Investment Grade Market - Market observation per 31 March 2021 -

2020 driven by corporates securing liquidity in response to the pandemic

  • Q1 ’21 loan volumes were 25% lower than Q1 ’20 and in line with Q1 ’19 levels pre COVD-19.
  • 2020 loan volumes remain around 40% higher than 2019, mainly driven by significant increases in H1 2020 as a response to COVID-19, with total volumes of GBP 240.4bn (2020) compared to 173.8bn (2019).
  • The number of deals in Q1 2021 was 124 compared to 160 and 138 in the same periods in 2020 and 2019 respectively; this implies larger average transaction amounts observed today as compared to the pre COVID-19 levels.

5-year UK Bank CDS spreads revert to pre COVID-19 levels

  • 5-year bank CDS revert to pre COVID-19 following hikes seen in Q4 2020 which related to national lockdown measures. Lloyds’ CDS spreads are the lowest among peers, closely followed by HSBC and Standard Chartered, which indicates lower levels of perceived risk but also potentially lower cost of capital for lending.