Banks across the UK look set to experience subdued loan growth throughout this year due to a number of factors, a financier has indicated.
Andrew Coombs, analyst at Citigroup, believes a combination of issues such as pressure from regulators to increase capital ratios and the fact both businesses and households will look to cut their levels of debt means loan take-up will flat-line, Reuters reports.
Earlier this week (6 February), a report by the Ernst & Young ITEM Club indicated that lending from banks will slip by 2.2 per cent during 2012 and Mr Coombs expects both the Royal Bank of Scotland and Lloyds Banking Group to see contraction.
However, financiers that are not state-owned will fare better, with HSBC and Standard Chartered set to see strong loan growth due to their business in Asia.
This comes after Adam Posen, policymaker at the Bank of England, told the BBC Wake Up to Money podcast that financiers are not currently lending enough.
By Gary Cooper
