Page 50 - E&B_septemvri 2015 ENG.indd

BANKING
ity of the customers. Of course, the
result of these changes in credit
conditions is the increased credit
approval rate. According to the
latest Financial Stability Report of
the National Bank, the credit ap-
proval rate for households is on the
historically highest level in the last
five years and equals 84.2%, which
in simplified terms means that
banks approve approximately 6 out
of 7 received loan applications. This
trend was registered in virtually all
types of credit products with the
greatest increase in the approval
rate, in the past two years, being
registered in the loans that are the
main drivers of growth, i.e. home
and consumer loans.
When we talk about loans to
households and their risk profile
we should not omit the aspect of
new borrowers who make their
first borrowings from banks. The
lack of credit history, as well as the
possible changes in the repayment
capacity are the main factors that
make these loans a bit riskier. Al-
though the share of new borrowers
in the total active borrowers tends
to decrease in both the number
of credit agreements and in the
volume of new loans, it is still an
important part of bank lending. In
fact, on average, 6.5% of total active
borrowers, or 9.5% of new loans in
the past five years were granted to
households that borrowed from
banks for the first time.
Achieved credit growth rates
also led to an increase in the
household indebtedness indica-
tors. The indicator for the share
of household loans in GDP at the
end of 2014 was at the highest his-
torical level of 21%. This indicator
in the eurozone countries, for ex-
ample, is approximately 60%. This
apparently indicates that there is
much room for growth of house-
hold loans, but it should be borne
in mind that there are many sub-
stantial differences between the
50 September 2015
Figures two markets, hence the pure nu-
merical comparison of the two
9.5% figures should not take us to the
wrong conclusion. What is perhaps
OF NEW LOANS IN THE LAST the most realistic indicator of the
FIVE YEARS HAVE BEEN capacity of the household sector
for further borrowing, is the share
APPROVED TO HOUSEHOLDS of debt in the disposable income. At
THAT HAVE TAKEN A BANK the end of 2014, this indicator was
at the highest historical level and
LOAN FOR A VERY FIRST TIME amounted to 29.6%. Given that dis-
posable income in recent years has
87.5% grown at a twice slower pace (2014:
5.9%) compared to the growth of
OF THE DEBTORS HAVE NET loans to households (2014: 12.1%) it
MONTLY INCOME LOWER THAN can be expected that this indicator
continues to rise, i.e. that the room
30 THOUSAND DENARS for prudent lending to households
is gradually being exhausted. The
75% fact that currently, on an aggregat-
ed basis, there are no serious prob-
OF THE CREDITS HAVE AN lems with the vulnerability of the
ADJUSTABLE INTEREST RATE household sector and that the debt
is relatively speaking still within
the so-called prudential frame-
work is evident from the move-
ments of the vulnerability indica-
tors of the household sector that
the National Bank provides in the
latest Financial Stability Report
. However, when analyzing these
indicators, one should not omit a
very important moment and that
is the distribution of households‘
disposable income and the level of
indebtedness of the individual in-
come groups within this distribu-
tion. According to the data on the
first quarter of this year, 58.2% of
the total credit exposure or 87.5%
of the debtors receive net monthly
income lower than Denar 30 thou-
sand. This in itself speaks about the
disposable income of the dominant
category of borrowers and about
the potential, i.e. the additional
room for further borrowing of this
dominant segment of the popula-
tion within the so-called prudent
level. Over 70% of credit products,
which according to their product
features are considered risky (con-
sumer loans and credit cards) are