Statistics 3 May 2023 10:00 AM

Corporate loan drawdowns continued as usual in March despite higher interest rates

In March 2023, Finnish non-financial corporations[1] drew down a total of EUR 1.8 billion of new loans from credit institutions operating in Finland.

In March 2023, Finnish non-financial corporations[1] drew down a total of EUR 1.8 billion of new loans from credit institutions operating in Finland. The average interest rate on new loans increased clearly to stand at 4.95% in March. The higher average interest rate was driven by the rise of the interest rate on large loans (over EUR 1 mn). In March, drawdowns of large loans amounted to EUR 1.3 billion, or 76% of all new corporate loan drawdowns. The average interest rate on new large loans was 4.76% in March, up by 1.15 percentage points from February. The average interest rate on loans of up to EUR 1 million was 5.54% in, up by 0.1 percentage points from February. By sector, the largest volume of new loan drawdowns was made in manufacturing (EUR 0.7 bn).

During the energy crisis of 2022, companies’ had an increased need for short-term funding in particular. The average repayment period of new drawdowns of corporate loans, at its shortest, was 1 year and 10 months in August 2022. Since then, the average repayment period has lengthened. In March 2023, it was 3 years and 11 months.

At the end of March 2023, the stock of loans to Finnish non-financial corporations[2] stood at EUR 61.9 billion. The loan stock has contracted from its peak level in October 2022 by EUR 2.8 billion. The reduction in the loan stock was driven by a decrease in the proportion of short-term loans with a repayment period of up to 1 year. In March 2023, the year-on-year growth rate of the corporate loan stock was 3.6%.

Loans

In March 2023, new drawdowns of housing loans by Finnish households amounted to EUR 1.2 billion, which is EUR 690 million less than in the same period a year earlier. Buy-to-let mortgages accounted for EUR 100 million of the new housing loan drawdowns. The average interest rate on new housing loans rose from February to stand at 3.93% in March. At the end of March 2023, the stock of housing loans totalled EUR 107.5 billion, and its year-on-year growth rate was 0.1%. Buy-to-let mortgage loans accounted for EUR 8.7 billion of the housing loan stock. At the end of March, the household loan stock included EUR 16.9 billion of consumer credit and EUR 18.1 billion of other loans.

Finnish housing corporations drew down EUR 400 million of new loans. In March 2023, the stock of loans granted to housing corporations amounted to EUR 42.8 billion.

Deposits

At the end of March 2023, the stock of Finnish households’ deposits totalled EUR 109.9 billion, and the average interest rate on these deposits was 0.45%. Overnight deposits accounted for EUR 98.6 billion and deposits with agreed maturity for EUR 6.0 billion of the total deposit stock. In March, Finnish households made new agreements on deposits with an agreed maturity in the amount of EUR 1,040 million. The average interest rate on these new fixed term deposits was 2.40% in March.

Loans and deposits to Finland, preliminary data
	January, EUR million	February, EUR million	March, EUR million	March, 12-month change¹, %	Average interest rate, %
Loans to households, stock	143,245	142,831	142,525	0.3	3.21
- of which housing loans	108,058	107,783	107,548	0.1	2.64
- of which buy-to-let mortgages	8,736	8,715	8,690		2.83
Loans to non-financial corporations², stock	104,867	104,655	104,702	4.7	3.44
Deposits by households, stock	110,918	110,225	109,913	-0.6	0.45
Households' new drawdowns of housing loans	846	979	1,216		3.93
- of which buy-to-let mortgages	77	81	96		4.18

* Includes loans and deposits in all currencies to residents in Finland. The statistical releases of the Bank of Finland up to January 2021, as well as those of the ECB, present loans and deposits in euro to euro area residents and also include non-profit institutions serving households. For these reasons, the figures in this table differ from those in the aforementioned releases.
1 Rate of change has been calculated from monthly differences in levels adjusted for classification and other revaluation changes.
2 Non-financial corporations also include housing corporations.