Banking statistics for April 2025
Commentary by Miroslav Zámečník, Chief Advisor of the Czech Banking Association
Households
Consumer loans - share of non-performing loans is the lowest in twenty-three years
The total volume of consumer credit (excluding overdrafts and credit cards) reached CZK 341 billion in March, an increase of eight tenths of a percentage point month-on-month; the year-on-year average increase was 9.1%. The recovery in consumption is thus partly financed by consumer credit, where we have been seeing similarly high growth for more than a year. Importantly, bank customers taking out consumer loans have been steadily repaying them well, with the non-performing ratio at 4.23%.
Mortgages
Last year was mainly marked by a significant recovery in interest in mortgage lending, and all indications are that interest in mortgages will continue this year. The annual volume of housing loans, including loans from building savings, rose by 6.2%, while CZK 26 billion in new mortgage loans (excluding refinancing) were granted in April, with interest rates falling from 4.78% in January to 4.72% in February, 4.68% in March and 4.65% in April. As can be seen, rates are going down slowly, but competition among banks will sharpen for both new business and mortgage refinancing if the recent past is any guide. At the same time, it should be pointed out that falling interest rates and rising average incomes are the two strongest factors driving up house prices, according to research by the Czech National Bank, and prices respond to a one percentage point drop in rates by rising many times over.
In the case of mortgages, where the borrower guarantees not only the property itself, but his entire property, there is a much stronger incentive to repay the loans taken out than in the case of unsecured loans, the clientele is also quite different and what is the result? An exceptionally low share of non-performing mortgages, which, according to CNB data, has fallen from 0.59% to the lowest level since June 2023. We have long been among the countries with the best payment morality in Europe.
April brought a remarkable eventfor loans granted by banks to sole traders, as the share of non-performing loans in this category fell month-on-month to 4.09%, the best figure in the last twenty-three years! High multiples of the current default rate were no exception at the time, and as recently as April 2015, the non-performing loan ratio was triple that at 12.30%.
Non-financial sector companies
If we look at the evolution of corporate loan balances, we see a resurgence in loan interest after some time, but with differences by corporate ownership. While there continues to be a month-on-month and year-on-year decline for public enterprises, and only a marginal month-on-month increase for foreign-controlled firms, domestic private firms have shown a strong recovery, with total lending up by almost two percentage points. Total new lending to non-financial corporations in April was 27 billion kronor and 22 billion kronor in euro-denominated loans. The interest rate on loans in koruna reached 5.2% and on euro loans 4.4% - both for new business.
The share of non-performing corporate loans, i.e. those that companies have difficulty repaying for more than 90 days, is at 2.56%, which is a very good figure in international comparison. Together with the high level of deposits, it suggests that at an aggregate level, "corporates" remain financially sound.
Development of the main segments of the credit market (year-on-year, %)
Source: CNB, CBA Monitor
The year-on-year growth rate of the population's deposits has bottomed out in the first half of 2022, rising almost every month since then, and since about May last year we have seen a very gradual decline to 5.4% in April 2025, when in monetary terms deposits rose by almost CZK 26 billion month-on-month to a new all-time record of CZK 3.721 trillion. Habit is an iron shirt, and so households still have over CZK 1,270 billion "lying around" in current accounts, despite the marginal interest rates.
The year-on-year pace of deposits of non-financial corporations shows a much higher volatility characterised by ups and downs of the curve, often very sharp; in April they were stagnant year-on-year. Corporate deposits have exceeded the volume of borrowings for almost five years now, since the covenant summer of 2020, and this accumulation of cash, previously uncommon, is the "new normal" related to the high degree of uncertainty in the global economy, to which export-oriented Czech firms are very sensitive.
Development of deposits in the main segments (year-on-year, %)
Source: CNB, CBA Monitor
Non-performing loans in main segments (%)
Source: CNB, CBA Monitor
Share of non-performing loans in EU/EEA countries (%)
Source: EBA