Commenting on the release of the Bank of England's Funding for Lending Scheme data, Adrian Coles, Director-General of the BSA said:
"We are delighted that 22 mutual lenders have now signed up to the Funding for Lending Scheme (FLS), showing that it is genuinely open to a wide range of lenders, as the BSA requested.
"However, we agree with Paul Fisher that it is too early to use these data as a reliable indication of the impact of the FLS on lending volumes. Many of our members with little or no prior experience of using mortgages as collateral for funding will have had to undertake more preparation work before actually drawing under the FLS, and so will not feature in these drawing figures. The design of the scheme means that the funds can be drawn at any time until the end of 2013, so it is not imperative to draw right at the start. Mutuals aim to lend sustainably over the longer term. Nevertheless, we are pleased that two BSA members had already made initial drawings by the end of September. Even so, it may take some time for these funds to feed through into any new lending.
"The FLS scheme is designed to encourage lending to households and businesses, with the price and volume of funds an institution is able to draw depending on how much it increases its lending. The data published by the Bank today shows that mutual lenders increased their stock of such loans by £2.6 billion in the third quarter, demonstrating that mutuals are playing a key role in lending to the real economy."
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Notes to Editors
1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 47 UK building societies. Mutual lenders and deposit takers have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of £245 billion, 20% of the total outstanding in the UK. They hold more than £250 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for 31% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
2. The Bank of England's press release can be viewed, here.
4. Follow the BSA on Twitter @BSABuildingSocs
Policy and External Affairs Officer
Building Societies Association
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