UK Debt Markets - Personal Loans Market Leaders
Lloyds Bank has the largest share (16.2%) of the personal loans market in the UK. It targets 25-54 year olds B,C1, and C2 customers. Barclays (12.8%) and Royal Bank of Scotland (7.5%) are also among the top three banks in the personal loans space and like Lloyds they too are centuries old. Santander Bank (6.5%) was founded in 2013, but has become fourth largest bank in the personal loan category in a very short time.
- Market share: 16.2%
- Target customer: Consumers aged 25-54 and in social grades B, C1, and C2 who have bank accounts.
- Founding date: Jun 3, 1765
- Description: Lloyds Banking Group is a UK-focused bank that offers a comprehensive list of retail and commercial banking services. It has the largest market share in mortgages and current accounts in the UK, and its share in the SME and the personal lending segment is growing.
- Market share: 12.8%
- Target customer: Unlike in the case of Lloyd, we were not able to find any information specific to the age and social grade of Barclay’s target consumer. Based on the age of the models on its website, its advertisement, and the personal loan advertised on its web page (£7,500 — £15,000), it is likely that the target consumers are millennials.
- Founding date: Nov 17, 1690
- Description: Barclays is a global banking company that offers retail banking, corporate and investment banking, credit card, and wealth management services. It operates in over 50 countries and its main markets are the UK and the US. The bank has around 48 million customers and employs 147,500 people.
ROYAL BANK OF SCOTLAND (RBS)
- Market share: 7.5%
- Target consumer: Royal Bank of Scotland offers loans ranging from £1,000 — £50,000 for tenures ranging from 2-10 years. RBS structures loans based on specific needs. It offers different types of personal loans: car loans, home improvement loans, debt consolidation loans, wedding loans, and holiday loans. Based on the types of loans it offers, its target customers mainly comprise millennials and Gen Xers.
- Founding date: 1772
- Description: RBS is headquartered in Scotland and is a UK-focused bank. It is a leading bank in the UK and provides retail banking, commercial, and investment banking services.
- Market share: 6.5%
- Target consumer: To be eligible for a Santander Bank loan, consumers need to be over 21 years of age and have an income above £6,000. The loans are available for terms of 1-5 years. Personal loans are offered for consolidating debt, buying a car, home improvement, and special occasions like a wedding or a holiday of a lifetime. Based on the use of the loans, the target group is likely to be from the millennial or Gen X generation.
- Founding date: Oct 2013
- Description: Santander Bank operates in the retail, commercial, and global corporate banking and corporate center segments. It is a wholly owned subsidiary of Banco Santander and has 15 million active customers, out of which 5.5 million are digital customers.
We were able to obtain all the required information except the target customers for some banks. Our first strategy to find the target customers was to search the company website and the annual report. None of these sources defined the customers specifically by age or socioeconomic class. However, in a couple of cases, we were able to determine the target group based on the application for which the loans were structured. Next, we searched advertising and marketing portals like WARC for case studies that define the target audience of the banks. While we succeeded in finding this information for one bank, we did not find any information pertaining to the other banks. Following this, we searched research reports by agencies like Nielsen and Credit Suisse but did not meet with any success. The reports did not provide any insights on who the target groups were; they largely contained information on the financials or marketing metrics.