The criteria for granting loans are tightened, but margins and interest costs down

In the fourth quarter of last year, banks again tightened the criteria for granting housing and consumer loans to households – according to the latest quarterly study “The situation in the credit market” presented today by the National Bank of Poland, which sums up the survey results to the chairmen of credit committees. Fortunately for consumers, banks have also lowered their loan spreads and out of interest loan costs again.

Stricter award criteria

In October-December, as much as 89.7% of net banks decided to tighten the criteria for granting housing loans to households, and in the case of consumer loans it was 70.1%. This means that it was the second quarter in a row with such a high percentage of institutions tightening the criteria – in Q3 it amounted to 46.3% and 66.4%, respectively.

Banks, as the main reason for this, stated the need to implement the T Recommendation. In the case of housing loans, this factor was indicated by 81.5% net of institutions, and in the case of consumer loans, 79.1% of them. It is worth remembering that the category, “other reasons / other factors”, in which the issue of Recommendation T is classified, also heavily influenced the results of the third quarter survey – then the percentage of such indications was respectively: 47.4% and 64.0 %.

Data in this respect are obviously not a surprise

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It is worth recalling that Recommendation T was adopted by the Polish Financial Supervision Authority on February 23 last year as a certain, based on a thorough examination of customer creditworthiness, set of rules for granting retail loans.

According to KNF assumptions, these recommendations are to improve the quality of credit risk management in banks. Banks were complying with some of these rules until August 23, and had 4 months longer for the next matching package. Therefore, the entire adjustment process fell mostly in Q3 and Q4 – to a smaller one in Q2 – and hence the result of the last two NBP surveys to chairmen of credit committees.

Normal margins and non-interest costs are falling

Importantly, from the point of view of consumers, in the fourth quarter the margins for the fifth time in a row for housing loans and the fourth for consumer loans went down. In the first case, their decrease in October-December was decided by 53.2% net of banks, and in the second by 30.4% of institutions.

However, it should be emphasized that the situation was different when it comes to the loan margin for loans with higher risk. The banks did not change its size for housing loans and increased it in the case of consumer loans (this was reported by 35.6% of the banks net).

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