Statistics 31 July 2017 1:00 PM

Banks’ consumer credit mainly tied to variable interest rates

In June 2017, the bulk (74%) of consumer credit (excl. overdrafts and credit card credit)1 granted by Finnish credit institutions was tied to variable interest rates,2 mainly Euribor rates of different maturities (63%). The proportion is slightly higher if the stock data of these loans are examined (78%). Consumer loans in terms of their cost are therefore – like housing loans – sensitive to rises in interest rates.

The average interest rate on new variable-rate consumer loans was 4.07% in June 2017. Meanwhile, the actual annual interest rate (annual percentage rate of charge, APRC), also taking other loan-service expenses into account, was 5.24%. In June 2017, approximately 23% of new consumer credit was tied to fixed interest rates, which are not affected by changes in market interest rates. The proportion of these loans has been declining in recent months.

The growth rate of the stock of Finnish households' consumer credit (excl. overdrafts and credit card credit) has continued to accelerate. In June 2017, the growth rate of the stock was 7.4%, compared with 4.4% in June 2016. The stock of unsecured consumer credit, in particular, has grown significantly. By contrast, annual growth in the stock of housing loans has slowed further and was 2.1% in June 2017.

Loans

Households drew down EUR 1.8 bn worth of new housing loans in June 2017. The average interest rate on new housing-loan drawdowns was 1.07% and the imputed margin 1.04%. At the end of June 2017, the stock of euro-denominated housing loans amounted to EUR 95.0 bn. Household credit at the end of June comprised EUR 14.9 bn in consumer credit and EUR 16.5 bn in other loans.

New drawdowns of loans to non-financial corporations (excl. overdrafts and credit card credit) amounted to EUR 2.4 bn in June. The average interest rate on new corporate-loan drawdowns declined from May and was 1.70%. The stock of euro-denominated loans to non-financial corporations at the end of June was EUR 78.3 bn, of which loans to housing corporations accounted for EUR 27.1 bn.

Deposits

At the end of June, the stock of household deposits totalled EUR 87.1 bn, and the average interest rate on the deposits was 0.16%. Overnight deposits accounted for EUR 64.5 bn and deposits with agreed maturity for EUR 7.7 bn of the total deposit stock. In June, households concluded EUR 0.3 bn of new agreements on deposits with agreed maturity, at an average interest rate of 0.41%.

1 The figure includes consumer credit granted via banks authorised to operate as credit institutions, excluding consumer credit granted by other financial institutions.
2 Incl. loans tied to Euribor rates and banks' own reference rates.

Key figures of Finnish MFIs' loans and deposits, preliminary data

  April, EUR million May, EUR million June, EUR million June, 12-month change1, % Average interest rate, %
Loans to households2, stock 125,677 125,900 126,318 2,4 1,54
    - of which housing loans 94,484 94,651 94,985 2,1 1,04
Loans to non-financial corporations2, stock  78,039 78,252 78,291 6,2 1,42
Deposits by households2, stock 86,823 86,302 87,081 3,4 0,16
Households' new drawdowns of housing loans 1,387 1,689 1,774   1,07

1 Rate of change has been calculated from monthly differences in levels adjusted for classification and other revaluation changes.
2 Households also include non-profit institutions serving households; non-financial corporations also include housing corporations

For further information, please contact:
Johanna Honkanen, tel. +358 9 183 2992, email: johanna.honkanen(at)bof.fi,
Olli Tuomikoski, tel. +358 9 183 2146, email: olli.tuomikoski(at)bof.fi.

The next news release will be published at 1 pm on 31 August 2017.

Related statistical data and graphs are also available on the Bank of Finland website: https://www.suomenpankki.fi/en/Statistics/mfi-balance-sheet/.

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