Consumer financing, the only one that maintained its rate in the face of the collapse in mortgages and the fall in loans to companies, is losing steam. Financial credit establishments lent 21,794.44 million euros between January and September, a figure that implies a year-on-year increase of 4.3%, but certifies a slowdown that has not been seen since the Covid pandemic when restrictions on mobility and Uncertainties that loomed over the economy encouraged savings among families to the detriment of consumption.
The evolution has gone from less to more in the year: the new concession grew by 14.6% until March and by 7.1% at the end of June because during the second stagnant quarter it barely advanced 0.6% and in the period The period between June and September even suffered a year-on-year decline of 0.9%, even though September is a traditionally active month due to purchases associated with the return of children and young people to school and universities.
The figures come from statistics compiled by the National Association of Credit Financial Establishments (Asnef) which brings together under its umbrella both bank financiers (Santander Consumer, CaixaBank Payments & Consumer, the subsidiary of BBVA or Sabadell Consumer, among others); such as from vehicle manufacturers such as Stellantis Financial Services, Mercedes-Benz Financial Services or Volkswagen Bank; of distribution chains (the financial institution of El Corte Inglés and its twins in Carrefour or DIA, for example) and specialists in consumer financing such as Cetelem, from BNP Paribas.
Higher than pre-pandemic levels
“Our investment is growing, less than last year, when it did so at 21.7%, but we are above pre-pandemic levels. What we have detected is a slowdown in demand,” explains Ignacio Pla, general secretary of Asnef. . A large part of the activity of these entities is financing at the point of sale that allows citizens to make purchases in installments in stores of household appliances, furniture, household goods, travel, vehicles, etc.
Between January and September, financial credit establishments carried out 6.14 million transactions with clients, which represents a decrease of 0.3%. This occurs after having recorded contractions close to 7% in the last two quarters and despite the 16% boost that transactions showed at the start of the year. “These falls may soften now because the last quarter of the year is a good time for consumption and we finance it: from Black Friday to the February sales and, above all, with Christmas,” confides the general secretary of Asnef .
Why is activity faltering? “There is less request, less demand and I think it is due, on the one hand, to a loss of confidence. When there is fear of what is to come, consumption is held back; and it is undoubtedly due to the fact that people have less money available. The cost has skyrocketed a lot. Inflation has consequences on families and their shopping basket, and so does the rise in rates because it makes financing more expensive,” reasons Pla.
It is not a solvency problem. Consumer financing, like credit in general, still does not allow for a deterioration in repayment. “We are calm because we see stability. We are at 6.47% compared to 3.56% for the total financial sector, without having experienced significant or worrying changes,” he shares. “As long as the unemployment and unemployment data do not change substantially, people continue to meet their credits and payment obligations,” he explains, although he recognizes that there are uncertainties on the horizon such as the potential impact of an economic slowdown or a worsening in geopolitical crises as occurred with the conflict in Israel after the war in Ukraine and whose effects are yet to be resolved.
Faced with this scenario, the entities themselves confess to having tightened the conditions for access to financing in the latest surveys on financing projections prepared by the European Central Bank (ECB) and the Bank of Spain. “People consume less because they have less disposable income and we, when we evaluate a client’s solvency, if we see less disposable income there are loans that we also have to deny or limit the granting of so as not to overindebt the client,” he points out.
Link with mortgages
In the reduction in demand there is an induced effect of the collapse in mortgage operations, given that the purchase of a home fuels the installment purchase of household goods, appliances and furniture. According to data from the Bank of Spain, banks signed mortgage loans between January and October worth 46,104 million, an amount 15.24% lower than that granted in the same period of the previous year and which barely doubles the consumer financing of financial establishments. of credit.
But at the same time there has been the opposite effect of encouraging the acquisition of goods and items of lesser value, precisely by delaying the purchase of apartments due to the increase in the cost of loans. “There are also people who dedicate these resources to a minor expense such as changing the furniture in the house, making a new kitchen or buying a car,” says Pla.
Consumer financing is the one that has had the least impact on the rise in interest rates. According to data from the Bank of Spain, the interest on these loans has risen from 6.10 to 8.23% TEDR – similar to the APR without including commissions – between December 2021 and last October. In parallel, the TEDR of new mortgages increases from 1.39 to 3.86% and from 1.28 to 5.10% in financing for companies.
2023-12-16 15:32:15
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