UK Loan Volumes & Banks

UK Loan Volume (in GBP billion) Q1 ’21 loan volumes approximately 5% lower than last year

Bank CDS spreads CDS spreads stabilised at pre COVID-19 levels

UK Loan Market - Market observation per 21 May 2021 -

Q1 ’21 loan volumes remain 10% above the same period in 2019 (pre COVID-19 levels) and only 5% lower than Q1 ’20

  • Q1 ’21 GBP loan volumes increased by 4% as compared to the previous quarter but remain 5% below the same quarter last year.
  • QTD loan volumes of £24bn remain significantly lower than full quarter Q2 2020 volumes of £55bn, and may not reach volumes during the same period last year which was characterised by the rush to secure liquidity as a response to the COVID-19 pandemic.
  • The number of deals in Q1 2021 was 162 compared to 159 and 136 in the same periods in 2020 and 2019 respectively. This implies a decrease in average transaction size as compared to pre COVID-19 levels

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

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