Banking statistics for November 2024
Commentary by Miroslav Zámečník, Chief Advisor of the Czech Banking Association
The Czechs are paying for large, and very conservative, savings, which has been true for businesses since the pandemic; when it comes to the appetite for debt, only the conservatism applies. The result is an extremely disciplined repayment record by European standards: we are the fifth best in the EU, with only the Swedes and the inhabitants of the Baltics ahead of us. We cannot yet conclude last year on the basis of hard statistics, but the banking statistics for November 2024 clearly confirm this.
Households
Consumer loans
Drawdowns of new consumer loans reached CZK 12.2 billion in November, just below October's four-year record of CZK 12.6 billion. Given rising wages in real terms, the willingness to borrow for consumption is confirmed. For the time being, the very low percentage of non-performing loans for consumer loans granted to the population does not suggest that households that are clients of banks are having serious difficulties in repaying. The share of non-performing loans in this category has fallen again month-on-month from 4.26% to 4.19% in November, and we see a similar trend in credit cards, as well as overdrafts and current account overdrafts. Interest rates on consumer credit have been falling slowly; both inflation and average nominal wage growth make real interest rates quite high.
Mortgages
According to CNB banking statistics, mortgages recorded a slight decline in the volume of new business from CZK 20.9 to 20.8 billion, with the interest rate falling slightly to 4.93% from 4.98% in October. The population's mortgage repayment behaviour remains quite exemplary, and the share of non-performing mortgages remains among the lowest in the EU, even in international comparison, at 0.6%.
Corporate loans
If we look at the development of corporate loan balances, we see a 6.2% year-on-year increase, with the volume of new CZK-denominated business (excluding overdrafts and revolving loans) rising to CZK 31.5 billion month-on-month from CZK 21.1 in October. Similarly, for euro-denominated loans, the volume of new business rose significantly in koruna terms from CZK 16.4 billion in October to almost CZK 28 billion, with the average interest rate on euro-denominated business at 5.07% p.a. compared to CZK 5.68% p.a.
The share of non-performing corporate loans, i.e. those that companies have trouble repaying for more than 90 days, rose somewhat from September's 2.42% and October's 2.56% to 2.60%, but anything below 3% is still an extremely good figure in this category. In absolute terms, this is an increase of just under half a billion crowns.
Development of the main segments of the credit market (year-on-year, %)
Source: CNB, CBA Monitor
Deposits
Population
The annual growth rate of household deposits has bottomed out in recent years in the 2022 half-year, has risen almost every month since then and is now around eight per cent since January this year, and 7.6 per cent in November as well as October.
Crown deposits of the public have been rising steadily, although the increase is not so much due to imputed interest, as interest rates have fallen significantly over the past year, with new business at 3.31 per cent per annum on popular deposits with agreed maturity. The volume of deposits of the public rose from 3,612 billion to 3,620 billion in November month-on-month, and again repeated the record in nominal terms. Of these, CZK 1,415 billion were in minimum-interest deposits with immediate maturity.
Businesses
The year-on-year dynamics of deposits of non-financial corporations is characterised by much higher volatility, characterised by ups and downs of the curve, often very sharp. Over the past year, corporate deposits rose by CZK 111.6 billion to CZK 1 609 billion. They continue to far exceed the volume of loans granted to businesses, and CZK 608.5 billion are term deposits, where management is not concerned with liquidity but with the interest yield, which has fallen to 3.39% per annum for deposits with agreed maturity.
Development of deposits in the main segments (year-on-year, %)
Source: CNB, CBA Monitor
Non-performing loans in main segments (%)
Source: CNB, CBA Monitor
Share of non-performing loans in EU/EEA countries (%)
Source: EBA