Regulators Scrutinise Car Loans Amid Fears of New Credit Bubble
www.morningstar.co.uk/uk/news/159703/regulators-scrutinise-car-loans-amid-fears-of-new-credit-bubble.aspx
Friday, 30 June 2017
The recent Bank of England Stability Report tested 'bad outcome scenarios'
From Comments
The recent Bank of England Stability Report tested 'bad outcome scenarios' looking at residual values and was nnot overly concerned on the impact to the lenders:
In a hypothetical scenario where car values at the end of
contracts turn out to be 20% lower than expected by lenders
at origination — and all PCP borrowers returned their vehicles
contracts turn out to be 20% lower than expected by lenders
at origination — and all PCP borrowers returned their vehicles
— Bank staff estimate that market-wide PCP losses could be
3%–6% of the total outstanding stock of car finance. Other
things equal, if these loss rates were experienced on the major
UK banks’ dealership car finance portfolios, it would imply a
reduction of 2–7 basis points in major UK banks’ aggregate
CET1 ratio.(2)
3%–6% of the total outstanding stock of car finance. Other
things equal, if these loss rates were experienced on the major
UK banks’ dealership car finance portfolios, it would imply a
reduction of 2–7 basis points in major UK banks’ aggregate
CET1 ratio.(2)
That is, from a starting point of 13.92%, the
ratio would fall to 13.85%–13.90%.
ratio would fall to 13.85%–13.90%.
Market-wide losses would
rise to 7%–10% of the outstanding stock in a more severe
scenario where car values at the end of contracts turn out to
be 30% lower than originally expected.
rise to 7%–10% of the outstanding stock in a more severe
scenario where car values at the end of contracts turn out to
be 30% lower than originally expected.
If these loss rates
were applied to major UK banks’ portfolios, they would imply
a reduction of 7–11 basis points in their aggregate CET1 ratio
were applied to major UK banks’ portfolios, they would imply
a reduction of 7–11 basis points in their aggregate CET1 ratio
Thursday, 29 June 2017
Cheap finance deals for new cars could be scrapped as experts warn of looming lending crash
Cheap finance deals for new cars could be scrapped as experts warn of looming lending crash
https://www.thesun.co.uk/motors/3895723/cheap-finance-deals-could-be-coming-to-an-end-as-car-finance-crash-looms-but-theres-never-been-a-better-time-to-buy-a-used-motor/
https://www.thesun.co.uk/motors/3895723/cheap-finance-deals-could-be-coming-to-an-end-as-car-finance-crash-looms-but-theres-never-been-a-better-time-to-buy-a-used-motor/
This and Stalling Growth Point to the Coming Great Depression
This and Stalling Growth Point to the Coming Great Depression
https://www.lombardiletter.com/this-and-stalling-growth-point-to-the-coming-great-depression/13198/
https://www.lombardiletter.com/this-and-stalling-growth-point-to-the-coming-great-depression/13198/
UK financial watchdog investigates car loans market
UK financial watchdog investigates car loans market
https://www.theguardian.com/business/2017/jun/29/uk-fca-car-loans-market
https://www.theguardian.com/business/2017/jun/29/uk-fca-car-loans-market
Wednesday, 28 June 2017
Car loans highlighted among Bank of England’s ‘pockets of risk’
Car loans highlighted among Bank of England’s ‘pockets of risk’
www.am-online.com/news/finance/2017/06/28/car-loans-highlighted-among-bank-of-england-s-pockets-of-risk
www.am-online.com/news/finance/2017/06/28/car-loans-highlighted-among-bank-of-england-s-pockets-of-risk
Car finance boom is 'unlikely to crash the industry' despite Bank of England worries
Car finance boom is 'unlikely to crash the industry' despite Bank of England worries
www.telegraph.co.uk/business/2017/06/27/car-finance-boom-unlikely-crash-industry-despite-bank-england/
www.telegraph.co.uk/business/2017/06/27/car-finance-boom-unlikely-crash-industry-despite-bank-england/
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