Car Loan Boom Led by Lloyds Stokes Loss Fears as Sales Dip
- Lloyds most exposed to car finance asset market among UK banks
- Riding in style becoming popular thanks to easy car loans
A salesman walks through BMW automobiles, produced by Bayerische Motoren Werke AG, as they sit for sale at the Big Motoring World dealership in Addington, London, U.K., on Friday, Sept. 25, 2015. BMW AG jumped in U.S. trading after German magazine Auto Bild said it has no indication the carmaker manipulated emissions tests, clarifying its earlier report on the X3 sport utility vehicle.
Photographer: Simon Dawson/BloombergAs U.K. car sales drop for the first time in six years, Britain’s banks could be forgiven for getting nervous about their 24 billion pounds ($32 billion) of exposure to motor loans.
The Bank of England has been raising alarm bells over the car finance market’s potential to trigger losses for lenders, with growth that’s outpaced household incomes. Lloyds Banking Group Plc, Britain’s largest mortgage lender, has the most skin in the game with 11.6 billion pounds of car loans, according to JPMorgan Chase & Co. analysts.