BIK Poland: Credit card limits granted in February increased by 34.5% y/y

Banks and SKOKs granted 33.2% more credit cards y/y in numerical terms in February 2023, the Credit Information Bureau (BIK) reported. In value terms, there was a 34.5% y/y increase in limits.

In January-February 2023, compared to the same period last year, credit cards recorded positive growth rates in numerical and value terms: 35.2% and 41%, respectively. In February 2023, banks issued 51,000 credit cards for a total of PLN 414 million in granted limits.

"In February 2023, we have positive growth in terms of numbers (+33.2%) and value (+34.5%) compared to February 2022. This is mainly due to the low base from last February. Note that card limits are the second riskiest credit product after cash loans. The value of the Quality Index in February was 4.17%. On a year-on-year basis, the value of the Index worsened - it increased by (+1.03 percentage points), and this is, apart from cash loans, the highest increase of all Product Indices," said BIK Chief Analyst Waldemar Rogowski.

BIK: The value of cash loans granted in January increased by 5.7% y/y:
Banks and SKOKs extended 5.4% more cash loans year-on-year in numerical terms in February 2023, according to the Credit Information Bureau (BIK). In value terms, there was a 5.7% increase.

In January-February 2023, cash loans recorded positive growth rates in numerical and value terms: 8.9% and 10.2%, respectively. The average value of a cash loan taken out in February 2023 was PLN 22,034 - an increase of 0.3% compared to February 2022, it was reported.

"February's positive growth rates of 5.4% in number and 5.7% in value confirm the increases in the cash loan market. For a full assessment of the situation, however, it should be taken into account that we show the dynamics in value terms according to nominal sales. However, when we use real terms, taking inflation into account, the dynamics of growth in the value of cash loans performs worse, and is even negative at approx. -11%. Thus, only the increase in the number of cash loans granted is a positive development. Analyzing the cash loan market taking into account the amount ranges of financing granted, we observe an interesting phenomenon. Attention is drawn to loans taken out for an amount of more than PLN 50,000, where the first two months of 2023 saw the highest positive growth rates both in terms of numbers (+14.4%) and value (+16.8%)," commented BIK Group Chief Analyst Waldemar Rogowski.

February's Quality Index reading for cash loans was 5.12%.

"Compared to February 2022, the value of the Quality Index for cash loans deteriorated (increased) by 1.44 percentage points, the most of all products. On a monthly basis, there was a slight improvement in the value of the Index. What is worrying is the phenomenon of deterioration of the Index value also in terms of a quarter, six months or nine months." - The BIK analyst stressed.

BIK: The value of installment loans granted in February increased by 11.8% y/y:
Banks and SKOKs extended 101.3% more installment loans year-on-year by number in February 2023, according to the Credit Information Bureau (BIK). The value of installment loans granted increased 11.8% year-on-year.

In January-February 2023, compared to the same period last year, installment loans recorded positive growth rates in terms of number and value: 81.9% and 7.1%, respectively. The average value of an installment loan granted in February 2023 is PLN 2,252, down 44.5% year-on-year.

"In January-February, the highest growth in terms of value, as in the previous year, included installment loans up to PLN 1,000 (+103.1%). Even more spectacular readings in the same range occurred in numerical terms, recording an increase of (+201.3%). Installment loans resulting from the transformation of BNPL into an installment loan are responsible for such extremely high growth rates in low-value installment loans. Interestingly, as in all of 2022, only high-value installment loans in the range above PLN 10,000 (-9.8% L and -21.3% W) recorded negative dynamics, so the trend from last year continues." - BIK chief analyst Waldemar Rogowski commented, as quoted in the release.

The quality of the installment loan portfolio has remained at a very low, safe level of claims for several years, which has just been confirmed each time by the monthly Index readings. February's reading of the Installment Loan Portfolio Quality Index was at 2.09%.

"On a positive note, the Index reading for installment loans remains low and safe. Admittedly, over the 12-month period, the value of the Index deteriorated (increased) by 0.96 percentage points, but it is still at a safe level, which is due to the fact that installment loans are taken out by customers with high creditworthiness and positive credit history," Rogowski added.

The analyst stressed that due to the increase in risk resulting from global conditions or the macroeconomic situation in Poland, a deterioration in quality should be expected in the coming quarters, and this calls for even closer monitoring of this phenomenon. In particular, the growth dynamics of the Indexes should be analyzed

Source: BIK and ISBnews