Mortgage boom, record bad debts and improvement in loan dynamics. This is the picture that emerges from the ABI's latest monthly report on the Italian banking market.
MORTGAGES AND INTEREST RATES
In the December 2014 - February 2015 quarter, new mortgage disbursements for the purchase of properties recorded an annual increase of 42,4%. Meanwhile, the decline in interest rates charged by banks on mortgages continues.
In March, the average rate on new home purchase transactions stood at 2,70% (it was 2,76% the previous month), marking the lowest value since October 2010. The rate summarizes the trend in fixed and variable rates and is influenced, explains the ABI, also by the variation of the composition between the disbursements based on the type of mortgage. In March, the share of the flow of fixed-rate loans amounted to 38,1%, up on the 33,7% of the previous month.
In general, in March interest rates on loans were positioned at historic lows in Italy: the average rate on total loans was 3,56% (3,6% the previous month).
SUFFERING
As for bad debts, in February they reached 187,25 billion euro, up by 1,8 billion compared to the previous month and by over 25 billion compared to February 2014, equal to an annual increase of 15,6%. The ratio of gross non-performing loans to loans rose to 9,8% in February (it was 8,5% a year earlier and 2,8% at the end of 2007), a value that reaches 16,5% for small operators economic (14,4% in February 2014), 16,5% for companies (13,7% a year earlier) and 7,1% for households (6,4% in February 2014).
On the other hand, net non-performing loans decreased from 81,3 billion in January to 79,3 billion in February. The ratio of net non-performing loans to total loans was 4,38% in February from 4,5% in the previous month.
APPLICATIONS
Although still on negative values, positive signals emerged in March for new bank loan disbursements. In fact, total loans to households and businesses presented an annual change of -0,9%: this is the best result since May 2012. The figure compares with the -1,5% achieved in February and with the - 4,5% in November 2013, when it had reached the negative peak of loans.
The improvement in the loan trend is even more evident, highlighted the ABI, if one examines the period from December 2014 to February 2015, when bank loans to businesses recorded an increase of around 7,6% over the same quarter of the previous year.
Overall, however, in March bank loans in Italy (private sector plus public administration) decreased on an annual basis by 1,68%, substantially in line with the -1,67% recorded in February.
