Funding for UK lenders falls in second quarter

Suzie Neuwirth

UK BANKS and building societies reported that their total funding volumes had fallen in the second quarter of 2013, according to data from the Bank of England today.

Lenders expect a further fall in funding volumes in the third quarter, according to the Bank Liabilities Survey.

Banks fund themselves via wholesale and retail markets, with wholesale investors ranging from other banks to hedge funds and insurers. A bank’s ability to raise funding influences their capacity to lend, which in turn will affect companies’ and households’ spending and savings decisions.

The research also showed that lenders’ capital levels had increased significantly during the period and are expected to increase further in the third quarter.