In October 2024, compared to October 2023, banks and credit unions granted more cash loans (+28.8%) and issued more credit cards (+15.7%). However, they granted fewer housing loans (-27.5%) and installment loans (-20.5%). In terms of value, banks and credit unions granted a higher value of three credit products: cash loans (+37.9%), credit card limits (+21.9%), and installment loans (+5.3%). Similarly, as in numerical terms, in value terms banks and credit unions also granted a lower value of housing loans (-23.8%).
From January to October of this year, banks and credit unions granted more mortgage loans (+45.3%), installment loans (+42.6%), cash loans (14.0%) and issued more credit cards (+3.9%). In terms of value, they granted a (+62.4%) higher value of mortgage loans, (+27.1%) cash loans, (+19.8%) installment loans, and a (+16.3%) higher value of credit card limits.
Struggling or changing trend in installment loans?
In October 2024, 20.5% fewer installment loans were granted compared to October 2023, and 16.7% less than in September 2024. However, the value of these loans increased by 5.3% year-on-year and by 2.7% compared to the previous month.
“Analyzing the latest data on installment loans in October, we are seeing a large drop in their number year-on-year and month-on-month. This is due to a smaller scale of low-value transactions, mainly from converting unsettled debt with deferred payment terms. This may be related to a decrease in retail sales in real terms. In value terms, however, we still have positive momentum, which is driven by high-value installment loans associated with financing more expensive goods and services,” says Dr. Waldemar Rogowski, Chief Analyst of the Credit Information Bureau.
Continued growth activity in cash loans
The number of cash loans granted increased by 28.8% year-on-year and by 11.6% compared to September 2024, and their value increased by 37.9% year-on-year and by 8.7% compared to the previous month.
“Since the beginning of 2024, the credit activity in the cash loan segment has increased numerically by 14.0%, and in value by 27.1% compared to the same period in 2023. Customers are taking out cash loans for increasingly larger amounts, and the main driver of sales growth in this segment are loans for more than 50 thousand PLN. This can be a result of increasing consumption needs, still high inflation causing price increases, and increased availability of loans for higher amounts, with higher creditworthiness due to increasing wages” explains Prof. Rogowski.
The average value of an installment loan granted in September 2024 amounted to PLN 2.453, which represents an increase of 32.5% compared to October 2023. The average value of a cash loan was PLN 25,144, which is an increase of 7.0% compared to October 2023.
Mortgage loans – year-on-year declines, but month-on-month increases
In October 2024, banks granted 27.5% fewer mortgage loans compared to October 2023, but compared to September 2024, their number increased by 12.1%. In terms of value, mortgage loans also recorded a decline of 23.8% year-on-year, but an increase of 13.0% compared to the previous month.
From January to October 2024, compared to the same period last year, mortgage loans continue to maintain a high positive dynamic both in numerical terms (+45.3%) and in terms of value (+62.4%).
“Mortgage loans – despite fears associated with the lack of another support program, they are doing quite well. In October, we saw more interest in mortgage loans than in previous months in both numerical and value aspects. Accrued since the beginning of the year, the number of mortgages granted increased by 45.3%, and their value by 62.4% compared to the same period last year. The value of the credit action in October amounted to PLN 7.36 billion, which is at a level not seen since March this year.
According to the chief analyst of the BIK, three factors are responsible for such a high dynamic:
1. This year’s credit action included amounts from loans with a pool of applications filed last year with the participation of the Safe Loan 2% program, which amounted to PLN 13.6 billion. Without this amount, the value of the credit action in the period from January to October 2024 would amount to PLN 57.6 billion and would be 26.6% higher compared to the same period last year.
2. The first half of last year was characterized by low credit activity (30% of the total credit activity of the entire 2023), which made a low base for comparisons in the first half of 2024. This was due to high-interest rates and waiting for the launch of the support program. The excellent second half of 2023 resulting from the launch of BK 2% affects the negative y / y momentum in October 2024.
3. We currently have clearly higher credit activity than in the first half of last year, despite the lack of a support program. An increase in the value of mortgage loans to a greater extent than their number indicates that customers are taking out loans for high amounts. This is related to acquiring more expensive properties as a result of still high market prices. The main factor responsible for the increase in credit activity in the period from January to October 2024 is an improvement in creditworthiness, which allows taking mortgage loans for higher amounts.
“In the coming months, in year-on-year terms, we should also observe negative dynamics in both size and value of mortgage credit activity” sums up Prof. Rogowski and adds:
“In October, the average amount of the housing loan granted was PLN 423,800 and was 5.1% higher than a year ago. It should also be noted that the average amount of a mortgage granted in October is the highest in history. Thus, a new record was set. Additionaly, by the end of October, 196,000 people have benefited from credit holidays on new terms from June 1, 2024, under 117,000 mortgage loans for the amount of PLN 34 billion.
Good quality of loans in the Polish banking sector
October readings of the values of all four Indices of loan quality significantly improved year-on-year. Compared to September, only a slight deterioration in the timeliness of repayment of installments (+0.04) and credit cards (+0.08) can be seen. However, these are fluctuations that do not disturb the overall good quality of loans in the Polish banking sector. Other quality indexes improved month-on-month (down): the cash loan index by (-0.05) and the same value of the mortgage loan index.
“All four Quality Indices still indicate a secure level of risk of the loan portfolio granted to households. Undoubtedly, better loan repayment goes hand in hand with an increase in borrowers’ wages and stabilization of the interest rate of the repaid loans. Nonetheless, as always, constant observation of the values of individual Quality Indices is necessary to identify signals about potential deterioration in the quality of the loan portfolio in advance, so far no such threat is visible on the horizon” explains the chief analyst of the BIK Group.
Source: https://ceo.com.pl/rynek-kredytowy-w-pazdzierniku-2024-najwazniejsze-dane-i-trendy-54258
