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Polish Credit Market Booms in February 2024: All Loan Types See Double-Digit Growth

FINANCEPolish Credit Market Booms in February 2024: All Loan Types See Double-Digit Growth

In February 2024, compared to February 2023, banks and Credit Unions granted more of all types of credit products: housing loans (+220.8%), installment loans (+86.4%), cash loans (+14.7%) and credit cards (+4.8%). The value of all granted loans also increased: housing loans (+305.1%), installment loans (+31.4%), cash loans (+27.9%) and credit card limits (+17.0%).

In the period January – February of this year, in numerical terms, banks and Credit Unions granted more housing loans (+259.3%), installment loans (+101.1%), cash loans (14.7%) and issued more credit cards (+4.4%). In terms of value, banks and Credit Unions granted (+351.5%) higher value of housing loans, a (40.0%) higher value of installment loans, (+25.7%) cash loans, and a (+10.1%) higher value of credit card limits.

All credit products in February 2024 maintained an upward sales trend. The activity in the cash loan market was confirmed not only by the increase in the number of +14.7%, but also the transaction value +27.9% in February. The comparison of the first two months of this year with the same period last year is equally positive, where the increase was +14.7% in the number of loans granted and +25.7% in the transaction value.

The high dynamics of sales value for installment loans continue, especially for loans up to 1,000 zlotys (+118.0%). In numerical terms, the increase was even more spectacular, amounting to (+180.9%). This high growth in low-value installment loans mainly results from converting unpaid obligations from the interest-free period in the context of purchases with deferred payment (so-called Buy Now Pay Later) into installment loans by purchasing these claims by banks.

The average value of a cash loan granted in February 2024 amounted to PLN 24,852 – an increase of 11.5% compared to February 2023. The average value of an installment loan granted in February 2024 is PLN 1,864, and it is lower than in February last year by 29.5%.

It is also worth noting that housing loans continue to be of great interest. What is behind such high loan activity? There are several main sources of this phenomenon.

In February 2024, banks granted 21.8 thousand housing loans worth PLN 9.1 billion. This high sales were influenced by a higher credit capacity, mainly due to the real increase in wages and the extension of the average loan period.

The current reading of the Index is better than a month ago (a decrease of -0.3 pp.). The damage for złoty loans is low, and loans already granted in the high interest rate environment are paid back very well.

The index reading for January and February 2024 recorded something very interesting. Among cash loans, we see a high demand and thus an increase by 14.7%. Additionally, there was a growth in credit card expenditure by 4.8%, with the value of loan granted also seeing an increase (housing loans by 351.5%, installment loans by 40%, cash loans by 25.7%, credit card limits by 10.1%). In simple terms, there was a continued rise in value and volume for cash loans and credit card loans.

Lastly, the Index Quality of portfolio for home loans in February 2024 was recorded at 1.45%. The damage of cash loans stands at its lowest level, with the highest damage being loans that are either indexed or denominated to the Swiss Franc. This could be likely due to the legal risks associated with ongoing court proceedings. Furthermore, The current – February reading of the Quality Index of the installment loan portfolio were at a level of 1.71% – only 0.26 percentage points higher than the Quality Index of housing loans.

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