Product Type: Market Research Report
Published by: Datamonitor
Published: March 2007
Product Code: R313-20838Description Introduction
As the UK market has become increasingly saturated and competitive, lenders are finding less space to grow and achieve high margins. One option is for lenders to look for new opportunities in foreign consumer credit markets. Yet entering a new market is never straightforward and does come with a number of risks. Still, for some lenders, taking the risk can be significantly worthwhile.
Scope
- Provides a number of case studies where UK lenders have gone into new markets abroad and have succeeded, analyzing their strategy and strengths.
- Discusses how the UK consumer credit market is performing against its Western European counterparts and the reasons why.
- Presents insight on which new markets lenders are venturing into and how they are doing it.
Highlights
The UK consumer credit market is the most mature in Europe, with the highest penetration of consumer credit balances outstanding as a proportion of GDP. In addition, new lending in the UK consumer credit market has performed poorly in comparison to the majority of other Western European markets over the past few years. Many Western European markets remain less penetrated and less competitive than the UK. Indeed, a number of international players such as the Royal Bank of Scotland, MBNA, and Barclaycard have expanded their operations to new Western European markets, where they have taken advantage of their experience in a younger and faster growing market. Turkey's consumer credit market has much potential. An increasing number of foreign players are becoming involved in the Turkish consumer credit market, and with indication that at some point Turkey will gain accession to the EU this market could be a great boon to those lenders that penetrate the market.
Reasons to Purchase
- Gain a thorough understanding of the dynamics facing lenders in the UK consumer credit market and what they can do about it.
- Understand where the new opportunities lie for UK lenders.
- Incorporates primary interviews from industry experts and secondary data from a wide range of sources.
Table of Contents - DATAMONITOR VIEW
- CATALYST
- SUMMARY
- ANALYSIS
- Lenders are increasingly coming up against a saturated UK consumer credit market
- The UK consumer credit market is contracting
- The UK consumer credit market is also highly competitive
- Unsurprisingly, lenders' margins are falling in the saturated consumer credit market
- Indeed, the UK consumer credit market is the most mature of all of Western Europe
- Consumer credit plays a more important role in the UK economy than it does in any other Western European market
- Moreover, in terms of new lending, the UK has performed poorly in comparison to the majority of the Western European markets
- Consequently, UK lenders should look into higher growth European markets to expand
- A number of international players have further expanded their operations in Western Europe
- In particular, there remain opportunities in the Spanish consumer credit market
- The Spanish consumer credit market continues to expand
- A number of foreign lenders have become involved
- The market continues to hold potential
- As an example, Barclaycard is taking advantage of this growing market
- Barclaycard is growing successfully in Spain
- Barclaycard entered the Spanish market directly
- Barclaycard's product range is designed to appeal to a range of customer segments
- Barclaycard is likely to expand further in Spain by offering a wider range of products
- In addition, the Turkish consumer credit market remains attractive to foreign acquisition
- Turkey is the fastest growing consumer credit market in Western Europe
- A number of reasons can explain Turkey's phenomenal growth
- A number of international players have developed a significant presence in the market
- As an example, GE Money now has a 25.5 per cent stake in Garanti Bank
- Garanti Bank is a major player in the Turkish consumer credit market
- By making such an acquisition, GE Money now has claim to a growing business in this market
- But there are inherent risks in entering such a market
- APPENDIX
- Supplementary data
- Definitions
- Balances outstanding
- CAGR
- Consumer credit
- Gross advances
- Methodology
- Further reading
- European consumer credit reports
- UK consumer credit reports
- Forthcoming consumer credit briefings
- Relevant links
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Western European markets' consumer credit balances outstanding as a proportion of their GDP, 2005
- Table 2: Growth in consumer credit gross advances in Western European countries, 2001-2005
- Table 3: Consumer credit gross advances in Spain, 2001-2005
- Table 4: Number of credit cards in Spain in issue by competitor, 2005
- Table 5: Consumer credit gross advances in Turkey, 2001-2005
- List of Figures
- Figure 1: The UK is the most mature of Western European consumer credit markets as a proportion of GDP, 2005
- Figure 2: From 2001 to 2005, new lending in the UK has been slower than most European consumer credit markets, 2001-2005
- Figure 3: Consumer credit in Spain has witnessed a solid expansion, 2001-2005
- Figure 4: La Caixa and BBVA dominate the Spanish credit card market, but Barclaycard is now fourth in terms of number of cards in issue, 2005
- Figure 5: Barclaycard Spain now offers a range of credit cards in order to appeal to different customer segments, October 2006
- Figure 6: Consumer credit gross advances are rising rapidly in Turkey, 2001-2005
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