Bank of England: Deposits from financial companies fell in December

Financial institutions saw total deposits from other financial corporations (OFCs) fall by £48.2 billion in December, new statistics show.

According to the latest research published by the Bank of England, the decline was driven by securities dealers (-£16.8 billion), intermediaries (-£11.1 billion), fund managers (-£8.5 billion) and securitisation special purpose entities (SPEs, -£6.7 billion).

Deposits from non-financial corporations (NFCs) also fell by £4.2 billion, with the biggest losses coming in the public administration and defence, and mining and quarrying sectors.

These declines actually offset increased deposits from companies in the real estate, retail trade and construction sectors.

The Bank noted that all-currency lending to OFCs also declined in December by £24.5 billion, while loans to non-financial companies were down by £5.2 billion.

Again, these declines were brought about primarily by reduced lending to securities dealers, fund managers and investment and unit trusts in the sphere of OFCs.

For NFCs, the biggest reductions in lending came from professional, scientific and technical activities, real estate and retail trade.

Putting the figures together suggests that firms in retail and real estate are choosing to save rather than borrow at present, while market turmoil continues to negatively affect OFCs.

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