Banks reduce retail lending
Retailers bore the brunt of banks’ lack of lending last year, with the total loaned dropping by 5.7%.
Outstanding loans to the retail sector reduced from £16.47bn to £15.53 according to accountancy firm Wilkins Kennedy. The value of loans outstanding to retailers has fallen by 18.7%, equating to £3.58bn over the last three years.
However lending to all businesses in the UK fell by only 0.1% in the same period.
Anthony Cork, partner at Wilkins Kennedy, said: “Banks have been reducing their exposure to the retail sector far faster than they have to other parts of the economy. The recent retail sector insolvencies will have added to the view amongst banks that they are still over-exposed to this struggling sector.
“The banks have been very patient with the sector but that patience is wearing thin.”
In the last six months there have been a number of high profile administrations in the retail sector including young fashion chain Republic.
Cork added: “Retailers are having to deal with a shrinkage in consumer spending, stubbornly high property overheads and steadily increasing competition from the internet. Unfortunately, the lack of available bank finance is just going to make the situation worse for retailers.”