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Housing loans. Banks announce tightening of lending criteria – National Bank of Poland survey

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In the third quarter of 2023, banks announce tightening of the criteria for granting all types of loans, including housing loans. This is the result of a survey conducted by the National Bank of Poland (NBP).

On Monday, the NBP published the results of the NBP’s quarterly survey on the situation in the credit market. It was pointed out that in the second quarter banks did not significantly change the criteria for granting loans to large enterprises and tightened them for small and medium-sized enterprises. At the same time, they tightened most lending conditions.

Banks announce tightening of lending criteria

Declining demand for financing investments and – for the first time since the first quarter of 2021 – for financing inventories and working capital weakened the demand in most segments of the corporate loan market, the release reads.

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It was also noted that after a short-term easing, in the period from April to June the banks again tightened the standards of granting housing loans. “They were motivated, among others, by the deterioration of forecasts of the economic situation and the quality of the housing loan portfolio, although at the same time they took into account the mitigating factor, which was the situation on the housing market,” the central bank said. The vast majority of banks in the second quarter of this year observed an increase in demand for housing loans.

In the opinion of the banks – as reported by the central bank – the continuation of tightening the lending policy in the segment of consumer loans in the second quarter of this year. resulted from the increase in the share of non-performing loans in the loan portfolio. “Banks increased their credit margins, including those for loans bearing higher risk, but also increased the maximum loan amount. According to the banks, the increase in the demand for financing the purchase of durable goods strengthened the demand of households for consumer loans,” the communiqué stated.

“For the third quarter of 2023, banks announce tightening of the criteria for granting all types of loans and expect a decrease in demand for loans to SMEs, as well as a further increase in demand for loans to large enterprises as well as housing and consumer loans,” the National Bank of Poland announced.

Mortgages not very profitable?

Monday’s “Rzeczpospolita” wrote that there is a growing risk that mortgage loans in Poland will be unprofitable, even toxic for banks. “If this actually happens, mortgages will become either less affordable or more expensive,” the daily wrote.

The newspaper pointed out that after the franchise holders won the battle for the right to a free loan, holders of PLN loans began to fight. Lawsuits are coming to the courts demanding that the WIBOR reference index (as allegedly calculated incorrectly) be removed from contracts.

The District Court in Zielona Góra at the beginning of July this year. spent judgment in which it acceded to the claim in the lawsuit to remove WIBOR from the zloty loan agreement.

Last week, NBP informed that the net profit of the banking sector in the first half of 2023 amounted to PLN 15.63 billion. This means an increase of 49%. compared to the same period last year. According to the data of the central bank, in June alone the sector recorded a net loss of PLN 1.29 billion.

TVN24 Biznes, “Rzeczpospolita”, PAP

Main photo source: Shutterstock



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