Bank records rise in borrowing

The Co-operative Financial Services (CFS) group has said the last year saw seen a rise in lending to consumers.

In its annual report, the organisation stated that the Co-operative Bank raised the level of lending by 12 per cent, based on a 21 per cent increase in customer deposits.

This source of funding accounts for all the capital that is used for issuing credit, CFS remarked.

Overall, the bank’ profits were down from £46.2 million a year ago to £41.7 million, but this year’s activity saw it merge with the Britannia Building Society.

Such a trend could indicate that the credit crunch is starting to ease as the Co-operative and other banks take steps to build up their balance sheets and thus gain more scope to issue products such as mortgages, loans, credit cards and overdrafts.

The recent decision by HSBC to offer a mortgage at a 1.99 per cent rate could “spark” its competitors into offering similar deals, partner relationship manager at online change of address service iammoving.com Jon Brown suggested.

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