Loan Growth in Czech Banking in 3Q2014

Banking | Czech Republic | December 16, 2014
Excel Sheet

Bank loans continue growing in the single digit numbers in the Czech Republic. In the third quarter, CZK 15.8 bil, or 0.62% qoq has been added to the total stock implying an annualised growth of 5.2% yoy:

As usually, retail loans and mortgages in particular remain the engine of the growth. Mortgages has grown further 1.9% qoq (and 7.1% yoy) and generated nearly 90% of the quarterly volume growth in the whole sector in 3rd quarter.

Having said that, penetration of bank lending remains fairly low in the Czech Republic. Bank loans accounted for 60.5% of GDP at the end of September 2014 while housing loans reached 21% of GDP.

With 55% of the total loans, the trio of the largest banks still dominate the lending market. While ČSOB remains fairly comfortable outgrowing the market in the last 12 months (with 8% yoy increase), Komerční and Spořitelna continue to lose mainly to:

UniCredit Bank, which rose its loan book nearly CZK 20 bil ytd (incl. Slovak business). This represents nearly 30% of the overall sector increase this year

Equa Bank, which increased its loan book 70% yoy in the last 12 months. Although bank's 3Q was the weakest in the last 18 months, the bank still sold 8% of this year's new loans

Building savings banks continue to suffer with their loan books falling another 0.8% qoq and nearly 4% yoy. Only ČMSS shows signs of stabilisation with a flat growth.