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If its cost of borrowing exceeds the interest it charges on loans outstanding, it loses money.
In many cases, the cost of borrowing exceeds the average annual return of investments.
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In June 2004, for the first time, total consumer borrowing exceeded the £1 trillion mark, roughly the equivalent of the country's economic output that year.
Weaker growth will result in public borrowing exceeding the £118bn pencilled in for the 2009-10 financial year in the PBR and the fresh fiscal boost in the budget will be accompanied by plans to raise taxes or trim expenditure once the crisis is past.
Specifically, the proposed rules would prohibit mergers or acquisitions that would result in any company's liabilities — customer's deposits and money the bank has borrowed — exceeding 10 percent of the financial industry's total liabilities.
In heavily shorted stocks, however, the cost of borrowing sometimes exceeds those profits, giving traders a financial incentive to sell short without borrowing.
And, if further confirmation were needed, today's figures come hot on the heels of the December borrowing figures of £15.4bn, which mean UK borrowing may exceed the limit set for this year (£108bn) with December's borrowing up on the same month last year.
The Treasury forecast in April that public borrowing would exceed 12% of GDP, and it could be more.
While that is still well below what Greece pays, analysts say Italy will have serious problems if its borrowing costs exceed 6 percent.
Yet official forecasts are that government borrowing will exceed £91bn – nearly £20bn more than Labour's allegedly "disastrously high" target, and more than £50bn above the Tory one.
The government backing would free CIT to make loans with improved profit margins, after its borrowing costs exceeded interest income in the first quarter by $17.5 million.
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