In January 2025, banks and credit unions issued 27.2% more cash loans compared to the same period in the previous year. However, there was a decline in the number of granted mortgage loans (-34.3%), installment loans (-24.2%), and credit cards (-4.4%). In terms of value, banks and credit unions granted higher amounts in cash loans (+43.3%) and credit cards (+10.2%), while mortgage loans (-32.6%) and installment loans (-12.2%) saw negative growth.
Cash Loans – A Booming Market
January saw a significant increase in cash loan issuance, both in terms of quantity and value. The number of cash loans grew by 27.2% year-over-year, while the total value surged by 43.3%.
“Customers are taking out increasingly larger cash loans, with high-value loans exceeding PLN 50,000 being the main driver of growth in this segment, just like last year. This trend is partly due to external and internal consolidations, as well as growing consumer needs. The increased propensity to make purchases using cash loans is reflected in the rise of retail sales, which has exceeded expectations. This is likely a result of higher creditworthiness linked to rising wages and stable, though still high, interest rates. In January, we recorded the highest-ever value of granted cash loans, amounting to PLN 9.257 billion,” explains Dr. Hab. Waldemar Rogowski, Chief Analyst of the BIK Group.
The average value of a cash loan reached PLN 25,788, marking a 12.6% increase compared to January 2024.
Significant Declines in Installment Loans
In January 2025, the number of installment loans granted fell by 24.2% compared to January 2024. The total value of these loans also dropped by 12.2% year-over-year.
“Analyzing the latest data on installment loans, we see a significant year-over-year decline in both the number and value of loans. This is due to a lower volume of small-value transactions, mainly originating from the transformation of unpaid obligations with deferred payments. Although the overall value of installment loans has also dropped, the decrease is less pronounced due to high-value installment loans used for financing more expensive goods and services,” says Prof. Rogowski.
The average value of an installment loan issued in January 2025 was PLN 1,979, representing a 15.8% increase compared to January 2024.
Stabilization in Mortgage Loans
In January 2025, banks issued 34.3% fewer mortgage loans compared to January 2024. In terms of value, the situation is similar, with a decline of 32.6% year-over-year and 10.2% compared to the previous month.
“Despite the lack of a new support program, mortgage loans are performing surprisingly well. The total value of mortgage lending in January 2025 amounted to PLN 6.95 billion, which does not significantly differ from the levels seen in the second half of 2024. Although we observe a year-over-year decline, this is mainly due to the fact that in January 2024, PLN 6.4 billion in loans were still issued under the Safe Credit 2% program (applications submitted in 2023). If we adjust the January 2024 loan activity by this amount, the year-over-year dynamics would actually show an increase of 78.2%. We forecast total mortgage lending for 2025 at PLN 88.2 billion. This forecast does not account for the effects of a new government program, which remains uncertain, or any significant interest rate cuts,” explains the Chief Analyst of the BIK Group.
In January 2025, the average mortgage loan amount was PLN 424,500, reflecting a 2.6% increase from the previous year.
Loan Quality Improved Compared to Last Year and Previous Month
January’s readings for all four Banking Credit Quality Indices showed significant improvements both year-over-year and month-over-month.
“All four Credit Quality Indices continue to indicate a safe level of risk for the household credit portfolio. The improved repayment quality is undoubtedly linked to rising borrower incomes and the stabilization of interest rates on outstanding loans. However, as always, continuous monitoring of individual Credit Quality Indices is necessary to detect any early signs of potential deterioration in credit portfolio quality. At present, there are no visible risks on the horizon. Mortgage loans remain the best-performing category, with a Quality Index value of 0.7% in January, followed by installment loans with an index value of 1.36%,” explains Prof. Rogowski.
Source: Manager Plus
