Latest Figures on Bounce Back Loan Defaults, Arrears and Guarantee Claims Put in By Lenders and Guarantee Claims So Far Paid Out to Them and the Suspected Fraud Figures Per Lender

Here are the latest sets of figures relating to the number of Bounce Back Loans per Lender that are being repaid on schedule,  have been repaid in full, along with the number of BBL’s that are  in arrears, in default along with how much each BBL Lender has so far claimed on the Government Guarantee and how much they have so far been paid out via that Guarantee too.

Be aware they cover the period up to and including July 31st, 2022, unless otherwise stated.

This provides an update on the performance of the Bounce Back Loan Scheme (BBLS), which was designed to provide rapid access to finance for small businesses affected by the coronavirus pandemic. The data in this release includes specific information on the value of loans marked as suspected fraud, and claims made and settled by individual lenders who are accredited for the scheme.

This data release is part of the government’s ongoing commitment to transparency in relation to BBLS. The government will continue to provide updates at regular intervals.

The data in this publication is as at 31 July 2022, unless otherwise stated. The data comes from information submitted to the British Business Bank’s (the Bank’s) scheme portal by accredited scheme lenders.

As of 31 July 2022, businesses have drawn a total of £46.6 billion through BBLS. The first evaluation of BBLS, published in June 2022, found that up to 500,000 businesses could have permanently ceased trading in 2020 in the absence of the scheme.

It is unfortunate that some have taken the decision to take advantage of this vital intervention by defrauding the scheme for their own financial gain. The government has always been clear that anyone who sought to do so is at risk of prosecution.

Checks were put in place from the outset to reduce the risk of fraudulent applications being successful. Lenders are the first line of defence, and were required to make or maintain know-your-customer and anti-money laundering checks and use a reputable fraud bureau to screen applicants against potential or known fraudsters. Lenders reported preventing over £2.2 billion worth of fraudulent applications as a result of these checks.

The government remains focused on working with the Bank, lenders and law enforcement agencies to tackle fraud in the scheme. This work is supported by the Public Sector Fraud Authority, who have led the development of a sophisticated analytics programme to better understand the level and types of fraud committed against the scheme.

We are working with enforcement bodies including the National Investigation Service (NATIS) and the Insolvency Service to investigate instances of fraud, recover fraudulent loans and penalise fraudsters. Since September 2020, NATIS has opened 273 investigations into BBLS fraud since September 2020, with a total value of £160 million. 78 suspects have been dealt with to date, with 49 arrests made. Meanwhile, Insolvency Service activity on BBLS fraud has so far resulted in 242 director disqualifications, 101 bankruptcy restrictions and 1 criminal prosecution. This enforcement activity is in addition to recovery work being undertaken by lenders as part of their obligations under the BBLS Guarantee Agreement.

At Spring Statement 2022, the government announced an additional £48.8 million of funding over 3 years to tackle public sector fraud. This included further investment of £13.2 million in NATIS, effectively doubling their capacity to investigate BBLS fraud, and £10.9 million to enhance the Bank’s counter-fraud and assurance work programme.

Headline figures

  • £28.3 billion: the Outstanding Balance of total Drawn loans making payments on schedule
  • £4.7 billion: the amount that has been Fully repaid by borrowers
  • £3.2 billion: the Outstanding Balance of loans in Arrears that haven’t yet progressed to Defaulted
  • £1.4 billion: the Outstanding Balance of loans Defaulted that haven’t yet progressed to Claimed
  • £2.6 billion: the Outstanding Balance of loans Claimed that haven’t yet progressed to Settled
  • £1.2 billion: the total Settled amount (the amount paid out to lenders under the BBLS Guarantee Agreement)
  • £1.1 billion: the total Drawn value flagged by lenders as suspected fraud

Notes

The values stated above will not add up to the total Drawn values as set out in column 1 of Table 3 (Detailed loan status by lender). That is because the above figures do not take account of events which can reduce outstanding balances – for example: partial repayments of a loan, certain recoveries received in respect of a loan, and amounts written-off loans by lenders.

To aid the reader’s understanding of the data, the terms used in this publication are defined at the end.

All businesses remain responsible for repaying their loans under BBLS and are fully liable for the debt.

It is important to recognise that it is still relatively early in the life of the scheme, and therefore it is too soon to definitively assess the performance of the BBLS scheme as a whole. Data being collected from accredited scheme lenders is subject to refinement, addition, and correction over time. Please see Limitations and further considerations below for further background.

Table 1: Life event values for BBLS lending (£m)

Lender Name Outstanding balance – On Schedule Outstanding balance – Arrears *** Outstanding balance – Defaulted Outstanding balance – Claimed Final amount – Settled ** Final amount – Fully Repaid
Barclays Bank Plc 6,425.33 737.89 362.29 608.49 490.35 994.11
NatWest Group plc 5,749.26 298.39 245.89 451.45 70.91 964.05
Lloyds Bank 4,938.03 739.80 197.97 714.39 0.00 924.21
HSBC UK Bank Plc 4,477.54 620.17 126.87 419.93 26.75 792.23
Santander UK 2,697.96 278.39 38.69 178.07 130.52 474.47
Starling Bank Ltd 804.73 174.98 284.19 47.29 106.30 89.94
Metro Bank 760.91 120.51 16.88 84.86 237.26 89.28
Bank of Scotland 619.20 77.37 21.17 79.34 0.00 121.39
Clydesdale Bank PLC 621.34 50.77 32.84 20.21 51.88 113.04
TSB Bank PLC 366.14 52.01 20.11 11.43 45.21 57.14
Co-operative Bank 180.25 7.21 5.99 11.68 2.29 43.58
Danske Bank 203.38 4.37 2.52 0.70 3.99 23.81
Bank of Ireland 178.22 12.19 1.57 0.32 3.72 17.12
AIB Group (UK) Limited 98.28 0.00 2.40 0.00 1.13 17.39
Tide Capital Ltd 27.38 0.00 0.93 0.00 19.91 1.95
Allica Bank* 30.70 0.00 0.09 0.00 0.00 0.00
Funding Circle 25.88 0.74 0.46 0.06 2.38 2.97
New Wave Capital Limited 6.14 0.00 0.00 0.43 9.42 2.06
Arbuthnot Latham & Co Ltd 10.23 0.05 0.00 0.15 0.05 2.47
Conister Finance & Leasing Ltd 4.58 1.53 1.49 0.14 2.42 0.01
Paragon Bank PLC 4.22 0.00 0.00 0.00 0.26 0.98
GC Business Finance (Previously BFS) 5.05 0.00 0.12 0.00 0.15 0.08
Skipton Business Finance Ltd 2.12 0.09 0.00 0.00 0.27 0.68
Investec Bank plc 2.53 0.05 0.00 0.05 0.00 0.30
Close Brothers Ltd 1.46 0.00 0.00 0.11 0.24 0.23
Total 28,240.87 3,176.49 1,362.46 2,629.10 1,205.42 4,733.49

*As part of an acquisition by Allica of a £0.5 billion SME lending portfolio from AIB, and with specific approval from BBB and HMG, Allica has acquired part of AIB BBLS and CBILS lending. The transfer of scheme loans between AIB and Allica took place within the Scheme portal in August 2022. This is why Allica is now listed, having not been included in previous publications.

** Settled – once the guarantee claim is processed and payment is released, the facility is marked as settled on the Scheme portal. Some lenders may be more advanced than others in their claims and recoveries processes which could lead to figures being distorted. Lenders may submit guarantee claims quarterly in line with the terms of the guarantee.

***Arrears – lenders submit arrears on a best endeavours basis either manually or through the Bank’s API functionality in the Scheme portal. It is not possible for smaller lenders to integrate with the Bank’s APIs.

Notes on the above data table

The values in the above table will not sum up to the total Drawn Value as it is not possible to take account of events which can reduce outstanding balances – for example: partial repayments of a loan, certain recoveries received in respect of a loan, and amounts written-off loans by lenders.

Values in Table 4 (Outstanding balance/final amount at furthest life event for loans with suspected fraud flags) are a sub-set of the values in Table 1 (Life event values for BBLS lending). Table 1 shows the life event values for all BBLS loans, whereas Table 4 shows life event values for BBLS loans that have a suspected fraud flag.

Table 2: Furthest life event reached by volume (number of loans)

Furthest life event reached by volume (number of loans)

Note: Fully repaid is the final life event, but is displayed first in this table for readability

Notes on the above data table

Table 2 shows the volume of loans, per lender, with the furthest life event reached. This is the only table that will add up to 100% because it is based on the volume of loans drawing on individual loan level data from lenders which reports the status of each loan – rather than the value of the loans (where, as noted above, there may be small discrepancies in the total depending on the precise payment status of the loans).

Table 3: Detailed loan status by lender

Lender Name Drawn value (£m) % of scheme total drawn value Suspected fraud value (£m)** Claimed value (reason ‘fraud’) (£m)***
Barclays Bank Plc 10,786.32 23.12% 259.41 50.15
NatWest Group plc 8,923.16 19.12% 151.97 37.18
Lloyds Bank 8,540.74 18.30% 304.80 118.20
HSBC UK Bank Plc 7,252.53 15.54% 91.97 65.41
Santander UK 4,290.63 9.20% 72.24 47.77
Starling Bank Ltd 1,605.68 3.44% 92.53 40.57
Metro Bank 1,435.78 3.08% 7.24 0.15
Bank of Scotland 1,046.58 2.24% 30.30 15.27
Clydesdale Bank PLC 1,009.33 2.16% 7.04 1.91
TSB Bank PLC 625.94 1.34% 35.45 17.64
Co-operative Bank 285.38 0.61% 3.44 1.79
Danske Bank 279.18 0.60% 4.12 3.43
Bank of Ireland 247.52 0.53% 16.69 0.60
AIB Group (UK) Limited 137.14 0.29% 2.18 0.28
Tide Capital Ltd 59.97 0.13% 0.40 0.40
Allica Bank* 35.68 0.08% 0.12 0.00
Funding Circle 35.41 0.08% 0.53 0.41
New Wave Capital Limited 19.20 0.04% 5.32 4.88
Arbuthnot Latham & Co Ltd 13.73 0.03% 0.00 0.00
Conister Finance & Leasing Ltd 10.42 0.02% 2.51 2.36
Paragon Bank PLC 5.98 0.01% 0.15 0.13
GC Business Finance (Previously BFS) 5.81 0.01% 0.23 0.15
Skipton Business Finance Ltd 3.64 0.01% 0.00 0.00
Investec Bank plc 3.30 0.01% 0.00 0.00
Close Brothers Ltd 2.26 0.00% 0.05 0.05
Total 46,661.32 100% 1,088.67 408.73

*As part of an acquisition by Allica Bank of a £0.5 billion SME lending portfolio from AIB, and with specific approval from BBB and HMG, Allica has acquired part of AIB BBLS and CBILS lending. The transfer of scheme loans between AIB and Allica took place within the Scheme portal in August 2022. This is why Allica is now listed, having not been included in previous publications.

**Suspected fraud value (£) – Value of drawn loans which are currently marked as suspected fraud by lenders. This flag can be added or removed by lenders at any point, based on their continued analysis of their loan portfolios and this table provides only the latest position as at 31 July 2022.

***Claimed value (reason ‘fraud’) (£m) – Lenders give a reason for a claim being made when they submit a guarantee claim under the BBLS. This is separate to the process of marking a facility as suspected fraud. Lenders cannot change the reason for making a claim once the claim is settled. This value includes all loans that have had a claim made on the guarantee – e.g., those that have been settled.

Notes on the above data table

Lenders are listed in order of total Drawn Value, from highest to lowest. Order of listing should not be used to make comparisons of lender performance.

All data excludes loans where a scheme guarantee has been removed and is no longer covered by BBLS.

The values in Table 3 (Detailed loan status by lender) will not correspond to the values in Table 1 (Life event values for BBLS lending) or Table 4 (Outstanding balance/final amount at furthest life event for loans with suspected fraud flags). This is because it is not possible to take account of events which can reduce outstanding balances – for example: partial repayments of a loan, certain recoveries received in respect of a loan, amounts written-off loans by lenders. Table 4 refers to life event values, not suspected fraud values.

Suspected fraud

Lenders have flagged £1.1 billion of the £46.6 billion of Drawn Value as suspected fraud (See Table 4 Outstanding balance/final amount at furthest life event for loans with suspected fraud flags). This relies on lenders’ business as usual threshold for fraud reporting. Where a lender has derived sufficient grounds to suspect fraud, they will indicate this via the scheme portal.

The statistics presented are only an indicator of the levels of suspected fraud which has been identified as at 31 July 2022. This figure is subject to change as lenders review cases. A ‘suspected fraud’ flag can be added or removed by lenders at any point based on their continued analysis of their loan portfolios, and only the latest position can be provided. ‘Suspected fraud’ will not necessarily equate to actual fraud in the scheme and the marking of a loan as “suspected fraud” within the scheme portal does not necessarily mean that there has been any proven wrongdoing on the part of the borrower.

Lenders employ different approaches to fraud identification according to their own individual systems and operational practices. These approaches can change over time due to technology advances, updated regulatory requirements and industry standards.

The data shows that of the £1.2 billion total Settled amount as at 31 July 2022, £263 million has been paid out to lenders against loans with a suspected fraud flag. Since fraudulent loans are likely to be among the first to default, it is expected that the proportion of guarantee claims linked to loans with a suspected fraud flag should decline as the scheme matures, though this will only become apparent over time.

The Bank provides BEIS with fraud estimates to feed into its year-end accounts. The current estimate stands at 7.5% but is due to be updated in the Department’s 2021 to 2022 Annual Report and Accounts. The Bank’s fraud and error loss estimate relates to its projections over the life of the scheme whereas what is reported in the current data is the suspected fraud identified by lenders as at 31 July 2022.

Life event values for suspected fraud loans

Table 4: Outstanding balance/final amount at furthest life event for loans with suspected fraud flags (£m)

Lender Name Outstanding balance – On Schedule Outstanding balance – Arrears *** Outstanding balance – Defaulted Outstanding balance – Claimed Final amount – Settled ** Final amount – Fully repaid
Barclays Bank Plc 15.50 7.77 19.65 36.43 168.26 4.10
NatWest Group plc 5.43 58.19 4.95 39.30 4.44 19.06
Lloyds Bank 30.56 6.01 3.86 154.89 0.00 62.09
HSBC UK Bank Plc 0.42 2.29 4.30 73.94 2.04 1.04
Santander UK 0.27 0.61 9.13 30.46 21.16 3.24
Starling Bank Ltd 0.05 0.05 44.65 10.23 31.38 2.62
Metro Bank 1.59 0.60 0.05 0.31 2.44 0.05
Bank of Scotland 1.25 0.19 0.49 18.63 0.00 6.09
Clydesdale Bank PLC 1.02 0.73 1.46 1.13 1.73 0.05
TSB Bank PLC 4.29 1.42 1.94 2.20 19.37 2.80
Co-operative Bank 0.00 0.11 1.39 1.60 0.27 0.00
Danske Bank 0.10 0.00 0.46 0.61 2.90 0.00
Bank of Ireland 9.59 3.03 0.84 0.23 0.83 0.05
AIB Group (UK) Limited 0.23 0.00 1.48 0.00 0.41 0.00
Tide Capital Ltd 0.00 0.00 0.00 0.00 0.40 0.00
Allica Bank* 0.10 0.00 0.00 0.00 0.00 0.00
Funding Circle 0.00 0.00 0.12 0.03 0.38 0.00
New Wave Capital Limited 0.12 0.00 0.00 0.00 4.88 0.00
Arbuthnot Latham & Co Ltd 0.00 0.00 0.00 0.00 0.00 0.00
Conister Finance & Leasing Ltd 0.00 0.06 0.54 0.03 1.88 0.00
Paragon Bank PLC 0.00 0.00 0.00 0.00 0.13 0.00
GC Business Finance (Previously BFS) 0.00 0.00 0.00 0.00 0.15 0.05
Skipton Business Finance Ltd 0.00 0.00 0.00 0.00 0.00 0.00
Investec Bank plc 0.00 0.00 0.00 0.00 0.00 0.00
Close Brothers Ltd 0.00 0.00 0.00 0.00 0.05 0.00
Total 70.52 81.06 95.33 370.03 263.11 101.24

*As part of an acquisition by Allica of a £0.5 billion SME lending portfolio from AIB, and with specific approval from BBB and HMG, Allica has acquired part of AIB BBLS and CBILS lending. The transfer of scheme loans between AIB and Allica took place within the BBB portal in August 2022. This is why Allica is now listed, having not been included in previous publications

** Settled – once the guarantee claim is processed and payment is released, the facility is marked as settled on the Scheme portal. Some lenders may be more advanced than others in their claims and recoveries processes which could lead to figures being distorted. Lenders may submit guarantee claims quarterly in line with the terms of the guarantee. Settled amounts may not match with the ‘Claim value’ column in Table 3 due to data corrections done by lenders post submission of a claim on the guarantee. These data corrections are not reflected in the data in Table 3.

***Arrears – lenders submit arrears on a best endeavours basis either manually or through the Bank’s API functionality in the Scheme portal. It is not possible for smaller lenders to integrate with the APIs in the Scheme portal.

Notes on the above data table

The above table includes all loans which are currently marked as suspected fraud by lenders at their most recent life event (On schedule, Arrears, Defaulted, Claimed, Settled, Fully repaid), or on schedule if no event has occurred – for example, a loan is counted as in ’Arrears’ in this table if it has been marked as in arrears but has not Defaulted or been Claimed.

Values in Table 4 (Outstanding balance/final amount at furthest life event for loans with suspected fraud flags) are a sub-set of the values in Table 1 (Life event values for BBLS lending). Table 1 shows the life event values for all BBLS loans, whereas Table 4 shows life event values for BBLS loans that have a suspected fraud flag.

Definitions of values

  • the value for ‘Claimed’ is the amount claimed under the guarantee
  • the value for ‘Settled’ is the amount paid out under the guarantee
  • the value for ‘Fully Repaid’ is the full loan amount
  • the value for all other life events is the outstanding balance

All data excludes loans where a scheme guarantee has been removed and is no longer covered by the BBLS Guarantee Agreement.

‘On schedule outstanding balance’ is as at the end of the last completed quarter as at 30 June 2022.

Other data is up to the end of last completed month as at 31 July 2022.

Definitions

  • Arrears – loans with missed repayments are deemed to be in arrears. Loans are tracked in 30, 60, and 90 day cohorts by lenders to manage risk. Lenders report monthly arrears updates through the Scheme Portal on a “best endeavours” basis. Some lenders submit arrears via the automated (API) functionality in the Scheme portal, but it is not possible for smaller lenders to integrate with this functionality so arrears are entered manually. Loans in arrears that have moved to a later life-cycle stage (such as Defaulted) will be reported in the later life-cycle stage but may still carry arrears. The value of arrears on table 1 represents the latest outstanding balance, and the accompanying graph, table 2, represents the volume (number) of loans with arrears.
  • Claimed – the lender has submitted a claim under the BBLS guarantee. Loans sit in the claimed status while the British Business Bank awaits/processes the invoice for the claim and runs relevant checks. Claims under the terms of the guarantee the claim must be paid within 30 days of receipt of the claims invoice. The value on all tables is the amount claimed under the guarantee. The accompanying graph represents the volume (number) of loans that have been claimed.
  • Claimed value (reason fraud) – lenders give a reason for a claim being made when they submit a claim on the guarantee. Currently, there are only two reasons a lender can provide for submitting a claim – either credit loss or fraud. This is separate to the process of marking a loan as suspected fraud and lenders cannot change the reason for a claim being made once the claim is settled. This value is the amount claimed under the BBLS guarantee agreement for all loans that have had a claim made where the claim reason is fraud, including, for example, those that have been settled.
  • Defaulted – loans where the lender has issued a formal demand to the borrower. The values set out in the table 1 and 4 under this header represent the latest outstanding balance. The accompanying graph on table 2 represents the volume, (number) of loans in a defaulted state.
  • Drawn value – the total loan amount for loans which have been drawn down by the borrower – (lenders have deposited this amount into borrowers’ accounts).
  • Fully repaid – the loan is considered closed as there is no further outstanding balance on the loan (the borrower has repaid the full amount).
  • On schedule – the loan is being paid as expected, including loans for which repayment is not yet due. The government paid a Business Interruption Payment (BIP) to cover the first 12 months of interest due on a loan. For BBLS, monthly principal repayments were not due to commence until the end of the 12-month period. The value on table 1 and 4 represents the latest outstanding balance (amount still due to be paid by the borrower). The accompanying graph on table 2 represents the volume (number) of loans that are on schedule as of the 31 July 2022.
  • Outstanding Balance – is a projected figure based on the amortisation profile of individual loans. It uses existing data points to identify the remaining loan value but is limited due to some lender data not being available.
  • % of drawn value – a lender’s total drawn value as a percentage of total BBLS drawn value.
  • Scheme portal – the database hosted by the Bank as part of its role in administering the scheme. It is used by all accredited scheme lenders to report on guaranteed loans and make claims under the guarantee agreement. The reporting requirements have evolved over time. The portal is updated at various points in a loan lifecycle as reported by lenders.
  • Settled – settlement has been made following a lender making a claim. Once the guarantee claim is processed and payment is released, the loan is marked as settled on the Scheme portal. The value (tables 1 and 4) represents the amount paid out under the BBLS, and again, the graph on table 2 shows the volume (number) of loans that have been settled.
  • Suspected fraud value – value of drawn loans which are currently marked as Suspected Fraud by lenders. This flag can be added or removed by lenders at any point, and only the latest position can be provided. Suspected fraud is a subset of the drawn amount.

Limitations and further considerations

The following points should be considered in relation to the data:

  • data is as at 31 July 2022 from the information continuously submitted to the Scheme portal by accredited scheme lenders. The Scheme portal is used by the British Business Bank and lenders to administer the BBLS. The accuracy of the data in the Scheme portal is dependent on lenders submitting accurate and timely data and the data is not real-time
  • the terms of and the timing of the BBLS was exceptional and may not be representative of the lenders’ risk appetites, their general loan credit quality, or their default experience on their business-as-usual lending
  • given the size of the BBLS, the large numbers of loans, and the speed at which they were offered and drawn down, data being collected remains fluid and subject to refining and correction over time
  • the timing and level of claims made under the guarantee will vary according to a lender’s business model and the characteristics of their customers (e.g., repayment options offered, age of businesses, whether BBLS loans were offered to new customers or only the lender’s existing customers)
  • the scale of the BBLS means some lenders may be more advanced than others in operationalising their claims and recoveries processes which could lead to figures being distorted initially but this will stabilise over time
  • lenders report arrears at different stages in a loan life cycle, what one lender may report as arrears another lender may not (for example some lenders will only report arrears at 90 days past due while others report arrears at 31 days past due as), as such, comparisons should not be drawn from arrears data
  • the BBLS Guarantee Agreement does not prescribe when a lender should serve demand on a borrower, this means that some lenders’ defaults will appear higher than others, but this may be because of their approach to the timing (amongst other things) as opposed to an indication of borrower behaviour and/or any overall management issues of their book
  • claims on the guarantee may subsequently benefit from recovery receipts achieved at a later date (which are not reflected in the figures above), in which case the net cost to government would reduce. BBLS borrowers remain liable to repay the debt after a claim has been made under the BBLS guarantee agreements
  • lenders may have responsibly fulfilled BBLS requirements but still experience a high comparative level of borrower defaults given the lack of credit or affordability checks
  • the number of loans claimed, and value is not necessarily related to the amount of fraud in a lender’s portfolio

The Scheme portal is the system of record for all facilities delivered through the COVID-19 debt schemes (which includes BBLS). Under the terms of the BBLS Guarantee Agreement, accredited lenders must submit facility level data into the portal on a periodic basis to allow the Bank to track the exposure of government to the portfolio. Arrears data is provided on a “best endeavours” basis. The data in this publication has a cut-off date of 31 July 2022, unless otherwise stated.

The Bank periodically audits the lenders for compliance with the BBLS Guarantee Agreement. The audit programme includes audits of lenders’ submissions to the Scheme portal. However, the Bank does not verify the data in the Scheme portal against the data in the lender’s systems (the “source data”) on a real time basis. The accuracy of the reported data in this publication is therefore dependent on accredited scheme lenders reporting the source data they hold on their systems into the Scheme portal in a timely and accurate manner. The Bank and the Department for Business, Energy & Industrial Strategy can therefore make no warranties as to whether the source data has been reported accurately.

Any party choosing to rely on the data detailed in this release (or any part of it) does so at its own risk. To the fullest extent permitted by law, neither the British Business Bank nor the Department for Business, Energy & Industrial Strategy assumes any responsibility or liability to any other party in respect of this data.

This data was first provided to Parliament via a Written Ministerial Statement on 5 September 2022 by the Department for Business, Energy & Industrial Strategy. As referenced in that statement, it is reproduced here to allow for further scrutiny of the BBLS.