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UK building society market to increase at a CAGR of 2.6%

Press Release   •   Aug 21, 2012 12:20 BST

The UK building society market has been forecast to increase at a compound annual growth rate (CAGR) of 2.6% over the next five years, to reach a market value of £13.9 billion in 2017-18.

Having experienced a turbulent period over the past five years, the UK building society market has suffered just as much as the rest of the financial sector in the UK.

The financial crisis resulted in demand for loans evaporating, losses on bad loans exploding and access to wholesale funding drying up. With interest rates slashed to emergency lows, UK building society industry revenue more than halved in the two years through 2009-10.

Over the five year period through to 2012-13, revenues within the market have been predicted to plummet at a negative CAGR of 12.9%. The industry faces another tough year in 2012-13, with the bleak economic outlook, tightening regulatory environment and ongoing European financial crisis expected to weigh on credit demand and revenue.

However, a modest recovery is expected over the coming five years, with growth prospects mild because consumers remain heavily indebted, limiting their capacity to borrow.

Stricter regulation of the financial sector may improve building societies' competitive position compared with the banks, by reducing the banks' abilities to gain market share by taking greater risks.

Major players within the 48 strong UK building society market includes; Coventry Building Society, Nationwide Building Society, Skipton Building Society, and Yorkshire Building Society.

For more information on the UK building society market, see the latest research: UK Building Society Market Report

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