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Bank credit to domestic enterprises and households February 2010

26/03/2010 - Press Releases

The annual growth rate of total credit expansion (1) to domestic enterprises and households slightly increased to 3.9% in February 2010, from 3.7% in January 2010 and 15.9% in December 2008. Compared with January 2010, credit expansion to enterprises exhibits a small acceleration, while credit expansion to households slightly decreased.

Credit to domestic enterprises

More specifically, the net flow of credit to domestic enterprises in February 2010 amounted to €463 million (February 2009: €-62 million) and the annual rate of credit expansion increased a little to 4.9%, from 4.5% in the previous month (December 2008:18.7%). It must be pointed out however that the net flow of credit in February 2010 has been influenced by an intra-group transaction that led to a transitory increase in the net flow. Without this transaction, the net flows of credit in February 2010 would have been negative (total credit minus €120 million and credit to enterprises minus €237 million).

The analysis of enterprise credit by branch of economic activity shows that in February 2010 there was a reduction in the annual growth rate of credit extended to “Agriculture”, “Trade”, “Tourism” and “Remaining Branches”, while there was acceleration or marginal change in all other branches of activity.

More specifically, credit expansion to “Industry” continued to depict negative annual growth rate for the sixth consecutive month (February 2010:-3.0%, January 2010:-2.9%, December 2008:15.8%), while credit expansion to “Trade” remains positive but low (February 2010: 1.6%, January 2010:3.2%, December 2008:19.5%).

Moreover, low annual growth rates are observed in credit extended to “Construction” (February 2010: 3.4%, January 2010:3.5%, December 2008:35.2%) and “Shipping” (February 2010: 2.3%, January 2010:1.9%, December 2008:17.2%).

On the contrary, credit expansion to the sectors of “Non-Monetary Financial Institutions” (18.9%), “Tourism” (7.7%), “Electricity-Gas-Water supply” (27.9%), “Communications-Transportation other than Shipping” (29.2%) and “Other” (7.0%) was relatively high and well above the average for the enterprise sector as a whole.

Credit to domestic households

The net flow of credit to households in February 2010 was positive, amounting to €117 million (February 2009: €259 million) and the annual rate of credit expansion declined a little to 2.7% from 2.9% in January 2010 (December 2008:12.8%).

More specifically, the net flow of housing loans amounted to €165 million in February 2010 (February 2009: €190 million), while its annual growth rate remained unchanged at the level of the previous month (3.6%) (December 2008:11.5%).

Consumer loans depicted a negative net flow of €54 million (February 2009: +€107 million), while their annual growth rate slowed down to 1.1%, from 1.6% in January 2010 (December 2008:16.0%).
Finally, the net flow of “other loans” to households was €7 million in February 2010 (February 2009: -€39 million), while their annual rate of change stood at 0.5% from -1.0% in January 2009 (December 2008:9.5%).


Bank credit to domestic enterprises and households - February2010 - Table

Note: The statistics on credit expansion to domestic enterprises and households for the reference month of March 2010 will be published on 29 April 2010.

(1) The outstanding amount of total credit to enterprises and households is equal to the sum of the outstanding amounts of the respective loans extended and corporate bonds held by banks, plus the outstanding amounts of securitized loans and corporate bonds. Net flows of credit are calculated from differences in outstanding amounts adjusted for loan-write offs and exchange rate variations associated with loans in foreign currency. More specifically, in the case of appreciation of foreign currencies against the euro, the positive exchange rate variations are subtracted from the difference in outstanding amounts, while in the opposite case of depreciation of foreign currencies against the euro the negative exchange rate variations are added to the difference in outstanding amounts. Moreover, in 2009 the net flow and the rate of change of credit include loans and corporate bonds amounted to €4.5 billion that have been transferred by domestic credit institutions to non-resident subsidiaries and to a domestic non-bank subsidiary. In February 2010, however, one bank repurchased part of these bonds (€0.3 billion) and although this transaction led to an increase in the outstanding amount of credit, it was not included in the net flow of credit and its annual rate of change.

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