During the 2nd quarter of 2017 the year-on-year growth of the stock of loans to households accelerated again to +2,5% y/y marked in May from 2,4% in the previous two months, confirming its highest level since February 2012 (data adjusted for securitisations). In June, according to ECB statistics, growth strengthened to +2,6% y/y. The trend is supported by mortgages and consumer credit. However, on a monthly basis, the growth of the stock of mortgages slowed down and flows also showed a weakening trend, while remaining high in absolute terms.
Looking at disbursements, in fact, since April a significant drop in gross flows has been observed both on an annual basis (-15,9% y/y in April and -9% in May and June), and in comparison with the 1st quarter of 2017 (-16,6% the seasonally adjusted average monthly flow compared to the 1st quarter). The first sign of a year-on-year drop in disbursements was seen in February (-1,6% y/y), albeit marginal. This evidence on credit volumes is consistent with what emerged from the CRIF surveys, which report a significant drop from April to June in queries to the Eurisc information system relating to requests for new mortgages and subrogations by households.
The drop in disbursements in the 2nd quarter is determined by one sharp contraction of renegotiations while the new contracts in May and June held up overall, unlike April. In fact, based on harmonized statistics from the ECB, new contracts decreased slightly in June after a modest increase in May (-0,8% y/y and +1,4% respectively). Conversely, renegotiations fell steadily over the quarter, by -28% y/y on average. In terms of share of total disbursements, renegotiations decreased significantly compared to the 1st quarter and the average of 2016. The European comparison confirms that in Italy the importance of renegotiations remains more limited than the euro area average. However, a slowdown is also beginning to emerge in the Eurozone as a whole, with the growth rate slowing down to +6,8% y/y in May and a first drop of -17,2% in June.
If you also look at the composition of the flows between floating rate and fixed rate, it emerges that the drop in total disbursements in April and May is determined by the combination of a more marked reduction in variable-rate disbursements and a slowdown in the growth of fixed-rate disbursements. In fact, the former decreased by 33% y/y in May after -40% in April while fixed-rate disbursements visibly slowed down to +8% y/y in May from an average of +31% y/y in 1st quarter. In consideration of the still extremely low level of interest rates, the preference for fixed-rate mortgages continued, resulting in May equal to 69% of total gross disbursements, as in April, after two months at 72%, which represented the highest level ever observed, according to the historical series since the beginning of 2003.
The recent evolution of interest rates can help explain the decline in renegotiations, the so-called "surrogates", and the slowdown in the growth of fixed-rate disbursements. In particular, in the 2nd quarter the average rate of new loans to households for the purchase of homes was confirmed to be slightly higher than in the last part of 2016. After the rise that began at the beginning of the year, in June the average rate settled at 2,09% from 2,12% in May. The average for the 2nd quarter was 2,11% compared to 2,04% in the 4th quarter of 2016, when the all-time lows were reached.
During the first half of the year, the recovery was driven by the fixed-rate component, which settled in May and June at 1% after the rebound in April to 2,33%. However, compared to the end of 2,34, the fixed rate recovered no more than 2016bp, thus remaining very low. Conversely, the variable rate, after a rebound in February, fell again to 15% in April, on the level at the end of 1,70, settling in May and then falling again in June to 2016%, which represents a new all-time low . Therefore, the spread between the fixed and floating rate, which had reached a low of 1,66bp in October 43, widened again in April and in June it rose to its highest level since mid-2016 (2016bp in June from 67bp in May).
In the European comparison, it emerges that since the last few months of 2015 the Italian variable rate has been slightly lower or in line with the euro area average, a positioning that is confirmed in the 2nd quarter of 2017. However, a gap remains in the case of the fixed rate , with a positive differential between the Italian rate and that of the Eurozone, which however returned to a decrease during the first half of the year down to 1bp in June, in line with the end of 44, after having widened at the beginning of 2016 to 2017bp. In fact, even the fixed rate in the Eurozone showed an upward trend in the six-month period, albeit more gradually than in the Italian case.
