Sweden’s Loan Growth Continues to Slow Down, According to Financial Market Statistics

The annual growth rate of household loans in Sweden has continued to decelerate, with the growth rate for housing loans from Monetary Financial Institutions (MFI) reaching 2.4% in April. The growth rate for lending to non-financial corporations also showed signs of slowing down. Although average loan interest rates continued to rise for both households and non-financial corporations, the increase was not as substantial as observed between February and March.

April 2023 Development Highlights

Lending: The annual growth rate for MFI’s total lending to households reached 1.9%, marking the twelfth consecutive month of declining growth. Housing loans accounted for 83% of the total lending to households, while consumer loans, comprising 6% of household loans, experienced a growth rate of 0.8%. Lending to non-financial corporations grew by 8.9% in April 2023 on an annual basis, representing the lowest growth rate since February 2022 when it was 8.8%. Overall, lending from MFI to households and non-financial corporations amounted to SEK 7,914 billion. Household loans accounted for 62% (SEK 4,906 billion), while loans to corporations accounted for 38% (SEK 3,008 billion). Lending to households and non-financial corporations, annual growth rate Financial Market Statistics, April 2023 Housing loans from entities other than MFI in the mortgage market, known as housing credit institutions, recorded an annual growth rate of 9.8% in April, down from 17.6% in March. Housing credit institutions accounted for 1.2% (SEK 50 billion) of household housing loans, which totaled SEK 4,109 billion.

Deposits: MFI’s total deposits from households amounted to SEK 2,694 billion, with demand deposits representing 82% (SEK 2,202 billion). In April 2022, demand deposits accounted for 90% of the then-total household deposits of SEK 2,614 billion. The general public’s holdings of banknotes and coins, previously defined as the M0 monetary aggregate, amounted to SEK 64 billion. The M3 monetary aggregate reached SEK 4,849 billion, showing a negative annual growth rate of -2.6% for the second consecutive month. Such a significant negative development has not been observed in this growth index since its inception in 1999.

Interest Rates on Lending and Deposits: The average interest rate on new housing loan agreements for households was 4.08%. The average interest rate for variable-rate housing loans was 4.06%. For households with binding periods between 1 and 5 years, the average interest rate on new housing loan agreements was 4.07%. In April 2022, the corresponding rate was 2.31%. The average interest rate on new lending agreements for non-financial corporations was 4.89%, compared to 1.66% in April 2022.

Interest Rates on New Agreements: Housing Loans and Loans to Non-Financial Corporations Financial Market Statistics, April 2023 The average interest rate for new deposits made by households into bank accounts was 1.30% in April. The interest rate on accounts with a fixed term or limited withdrawals reached 2.11%, exceeding 2% for the second consecutive month. For non-financial corporations, the average interest rate for new deposits into bank accounts was 1.42%. The corresponding rate for accounts with a fixed term or limited withdrawals stood at 2.

https://www.scb.se/hitta-statistik/statistik-efter-amne/finansmarknad/finansmarknadsstatistik/finansmarknadsstatistik/pong/statistiknyhet/finansmarknadsstatistik-april-2023/

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