The latest FLS data from the Bank of England shows that mutual lenders who are signed up for the scheme increased the amount of lending to the real economy by £2.3 billion in the first quarter of 2013, while the other banks and lenders in the scheme reduced the loans on their books by £2.6 billion.
Since the FLS reference period started at the end of June 2012, mutual lenders have increased the loans they have made to ‘households and businesses’ by £7.3 billion, in contrast to a reduction of £9.1 billion by other lenders.
The amounts drawn from the scheme in the first quarter of 2013 by mutuals totalled £2.3 billion, compared to £0.3 billion by other lenders. Since the FLS opened, mutuals have drawn down a total of £4.6 billion compared to £11.8 billion by other lenders.
Commenting, Adrian Coles, Director-General of the BSA, said: “The Funding for Lending Scheme data published today by the Bank of England confirms that building societies and other mutual lenders continue to play a major role in lending into the real economy.
“A number of mutuals have now drawn from the scheme, but even without this funding the sector has been expanding the volume of loans to support households and businesses to help them to realise their aspirations. In contrast, many other large lenders continue to cut back on the loans they are making.
“The scheme does present challenges to mutual organisations which will always rely on savers for the majority of their funding needs. As interest rates across the market decline, a balance needs to be struck between protecting savers and assisting borrowers, something that building societies and other mutuals are acutely aware of.”
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