Funding for Lending scheme ends for Banks and Building Societies

by Property 118

9:03 AM, 3rd January 2018
About 12 months ago

Funding for Lending scheme ends for Banks and Building Societies

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Funding for Lending scheme ends for Banks and Building Societies

The Funding for Lending Scheme (FLS) was made available by the Bank of England to encourage banks and building societies to lend more to households and businesses. It did this by providing funding to these firms for an extended period, with the quantity of funding we provide linked to their lending performance.

The FLS allows firms taking part to borrow UK Treasury Bills in exchange for eligible collateral. It was launched by the Bank and the Treasury in 2012. Firms could borrow from the scheme until January 2018.

The concern is this withdrawal of more cost effective funding may have an upward pressure on the cost of mortgages and Buy to Let.

It is unclear by how much and by when this could feed into the system as many lenders have been recently cutting rates.

You can see from the chart below who was making use of the FLS and might therefore be affected.

FLS Group Aggregate outstanding FLS drawings as at 30/09/17 (£mn)
Total of which net FLS Extension drawings
TOTAL 43,086 35,381
Aldermore 0 0
Arbuthnot Latham 107 107
Bank of Cyprus 75 75
Bath Investment & Building Society 0 0
Cambridge & Counties Bank 44 44
Cambridge Building Society 60 60
Charter Court Financial Services 0 0
Close Brothers 178 178
Coventry Building Society 1,000 1,000
Cumberland Building Society 325 325
FirstRand Bank 49 49
Furness Building Society 30 0
Hinckley & Rugby Building Society 0 0
Investec Bank 570 570
Julian Hodge Bank 37 37
Kleinwort Benson 0 0
Leeds Building Society 0 0
Leek United Building Society 0 0
Lloyds Banking Group 27,100 23,100
Mansfield Building Society 21 10
Market Harborough Building Society 51 51
Metro Bank 365 293
Monmouthshire Building Society 0 0
Nationwide Building Society 3,000 0
Newbury Building Society 44 44
Nottingham Building Society 380 230
OakNorth Bank 0 0
OneSavings Bank 282 282
Paragon Bank 109 109
Progressive Building Society 0 0
RBS Group 0 0
Saffron Building Society 25 25
Sainsbury’s Bank 260 110
Santander 3,175 3,175
Secure Trust Bank 0 0
Shawbrook Bank 101 101
Skipton Building Society 400 400
Teachers Building Society 8 5
Tesco Bank 0 0
United Trust Bank 30 30
Virgin Money 2,037 2,037
Wesleyan Bank 35 35
Yorkshire Building Society 2,900 2,900
Other participants 290

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