Volume of new bank loans rose in March for first time in more than 6 months

The volume of new bank loans rose in March and reached its highest level since last July. Prior to this, the volume of new bank loans had fallen steadily since November 2008, becoming more or less stable in February 2009. This news was announced at today’s presentation of the new Credit Barometer by Petr Kučera - Executive Director of CCB - Czech Credit Bureau.​
In a year-on-year comparison, the volume of new bank loans is at virtually the same level as in the same month last year. The largest rise in bank lending was seen among individual consumers and sole traders. “A similar volume of new loans was last recorded back in February 2008," said Kučera, but added he was unsure of the reasons for the rise in this category.

New non-banking loans have risen steadily since the beginning of the year. The largest volume of non-banking loans since September 2008 was recorded in March this year, with more than 11 percent more loans being granted in March 2009 than in March of the previous year.

The volume of defaulted loans is also rising, but has not exceeded acceptable levels. Installments which are three or more months overdue are recorded for 2.95 percent of the total volume of loans in the non-banking credit portfolio. The highest risk category is that of individual consumers, where the volume of defaulted loans has risen to 4.1 percent.
Operating loans became the highest risk category of bank loans in March, where the volume of installments three or more months overdue rose to 7.7 percent of the total volume of operating loans provided by banks. In the same period last year, this figure was only 3.3 percent. However, operating loans only represent 0.3 percent of the total volume of loans recorded in the credit register.

Regarding consumer loans, overdue installments are recorded for 4.9 percent of the total volume, which represents an increase of almost 0.9 percent compared to last year. For mortgages and building society loans, the volume of defaulted loans is only 0.18 percent.
The new Credit Barometer is based on the monthly monitoring of credit transactions recorded in the Banking (BRKI) and Non-Banking (NRKI) Credit Registers.

At the end of March, Czech households owed CZK 906.3 billion to banks and financial institutions.  Their indebtedness therefore rose from February by approximately CZK 10 billion. Households have increased their indebtedness by approximately CZK 150 billion over the last 12 months. These figures are based on data announced by the Czech National Bank at the end of April.