Banking statistics for April 2024
Commentary by Miroslav Zámečník, Chief Advisor of the Czech Banking Association
The April data brought a slight weakening in the year-on-year growth rate of loans taken out, most notably by businesses, where the rate fell from 10.7% to 9.3%, while loans to households rose by 4.5% year-on-year, compared with 5% in March.Meanwhile, the take-up of new consumer loans rose to CZK 12 billion in April, while mortgages rose to CZK 18.75 billion. New corporate loans in euros rose by almost 20 billion crowns in April at an interest rate of 5.3%, while loans in crowns rose by 23.4 billion crowns at an agreed interest rate of 7.1%; the interest rate differential between euro and crown loans thus reached 1.8 percentage points.As regards the time structure of loans, according to CNB banking statistics, short-term koruna loans with a maturity of up to one year recorded the most significant month-on-month increase of almost CZK 6.7 billion. By contrast, the volume of medium- and long-term loans stagnated in April.
Development of the main segments of the credit market (year-on-year, %)
For deposits, the decline in their interest rate, which we have been observing since December last year, and a more optimistic consumer mood should lead to a gradual return of the savings rate to the long-term average.The annual growth rate of household deposits has reached its low point in recent years in the first half of 2022, has risen almost every month since then and is now above 8% for the fourth month, which is still relatively high. On a month-on-month basis, non-term deposits of the public rose by nearly ₹37 billion to ₹2.519 trillion, while term deposits fell marginally from ₹959.9 billion to ₹959.6 billion. Thus, the change in sentiment towards a greater willingness to spend has not yet been reflected in the decline in deposits.If we look at the graph of the year-on-year dynamics of deposits of non-financial corporations, there is much higher volatility characterised by ups and downs of the curve, often very sharp. We are currently seeing a decline in momentum since December from 7.5% year-on-year to 5.4% in March and 5.5% in April. Non-fixed corporate deposits rose by almost CZK 18 billion to CZK 970.4 billion, while fixed-term deposits fell by almost CZK 5 billion month-on-month to CZK 587 billion
Development of deposits in the main segments (year-on-year, %)
Non-performing loans - still close to the minimaThe recession did not affect banks' loan portfolios as much as in previous cycles, thanks to the massive support that indebted the state. Simply put, the loan portfolio of banks operating in the Czech Republic remains as healthy as a turnip. In the case of non-financial corporations, the share of non-performing loans is at 2.6%, seven hundredths of a percentage point from the absolute minimum. Households, at 1.25% of non-performing loans, are at an extremely favourable level for the third month in a row. Mortgages continue to pay like clockwork, with the non-performing ratio holding at around 0.6% for almost two years.
Non-performing loans in main segments (%)
Note: the year-on-year comparison of stock figures (loan stocks as of the date, not new business for the month) is distorted by the "Sberbank factor", which lost its licence last spring, so all loans, uninsured deposits and some insured deposits that former Sberbank clients initially kept at home dropped out of the banking statistics. For April 2023 and onwards, Sberbank's loan portfolio with a nominal value of CZK 47.1 billion is again in the banking statistics at a cost of CZK 41 billion, as it was taken over by another bank in one contract. In a year-on-year comparison, this distortion will be particularly noticeable for loans until April 2024;