Eurozone credit to companies and households increases +0.3%

Spanish banks credit lending

Bankia Estudios | The credit statistics for Eurozone residents elaborated by the ECB for May shows an increase in the balance for companies of households of +0.3% (+35.775 Bn€), in line with the monthly increases so far this year and the same as the increase in May 2018.

The interannual variation remains +2.4%, a level around which it has stabilised since the second half of 2018. The total balance is 1o,274.189 Bn€, 69% in the core economies.

By sectors, in May credit to Eurozone companies grew +0.6% (+28.130 Bn€), in line with the previous month (+0.5%) and the same rate as in May 2018. The evolution of company credit is not homogenous across countries as the balance increases in all the core countries (+0.8% monthly in aggregate) but is uneven in the periphery (in aggregate +0.3%). In interannual terms, company credit remains +2%, with a significant difference between the core (+6%) and the periphery (-5.8%).

Household credit in the Eurozone increased +0.1% (+7.645 Bn€), in line with the previous month (+0.2%) and the same as May 2018. By destinations, housing grew +0.1% and consumption 0.8% monthly, while the rest fell -0.2%. In interannual terms, the rate improved minimally by one tenth to +2.8%, a level which has not been exceeded since December 2017. By destinations, housing increased interannually +3.5%, a fairly stable rhythm this year, while consumption increased +4.7% (+6 tenths above the month before) and the rest fell -3.3%, the same as the previous month.

By geography, credit to companies and households in the core economies grew +0.4% in May (+27.901 Bn€), in line with the previous month (0.5%) and May 2018. This month credit to companies grew +0.8% and households +0.1%, with housing +0.1%, consumption +0.8% and the rest -0.3%. By countries, all increases their balances in the month (all positive for companies and only two monthly falls for households, France -0.4% and Luxembourg -2.2%). In interannual terms, credit to companies and households increased +4.9% in the core countries, one tenth less that the previous month; companies advanced +6% (the highest since the beginning of 2009) and households +4.2%. By destinations of household credit, housing increased +4.9%, consumption +3.6% (+1 pp in the month) and the rest of financing +0.0%.

In the periphery the aggregate balance increased +0.2% (+7.125 Bn€) in May compared to stability the month before and in line with the +0.1% in May 2018. All sectors increased in the month: companies +0.3% and households +0.2%, with housing +0.1%, consumption +0.8% and the rest 0%. By countries, small falls predominate, except in Ireland +1%, Spain +0.5% and Portugal +0.3% which together make the aggregate positive. In interannual terms, the fall in the balance remains around -3.1%, in line with this year´s rates. The rates by sector also remain almost unchanged in recent months: companies -5.8% and households -0.7%, with housing very stable over the year at 0.4%, consumption +6.8% and the rest -8.4%.

In Spain, the credit balance for companies and households resident in the Eurozone increased +0.5% (+5.593 Bn€) with an increase for companies of +0.9% and households +0.2%, combining housing 0%, consumption +1.3% and the rest o.2%. In interannual terms, the total fall for companies and households improved one tenth to -1%.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.