Corporate loan drawdowns continued as usual in March despite higher interest rates

In March 2023, Finnish non-financial corporations[1] drew down a total of EUR 1.8 billion of new loans from credit institutions operating in Finland. The average interest rate on new loans increased clearly to stand at 4.95% in March. The higher average interest rate was driven by the rise of the interest rate on large loans (over EUR 1 mn). In March, drawdowns of large loans amounted to EUR 1.3 billion, or 76% of all new corporate loan drawdowns. The average interest rate on new large loans was 4.76% in March, up by 1.15 percentage points from February. The average interest rate on loans of up to EUR 1 million was 5.54% in, up by 0.1 percentage points from February. By sector, the largest volume of new loan drawdowns was made in manufacturing (EUR 0.7 bn).

During the energy crisis of 2022, companies’ had an increased need for short-term funding in particular. The average repayment period of new drawdowns of corporate loans, at its shortest, was 1 year and 10 months in August 2022. Since then, the average repayment period has lengthened. In March 2023, it was 3 years and 11 months.

At the end of March 2023, the stock of loans to Finnish non-financial corporations[2] stood at EUR 61.9 billion. The loan stock has contracted from its peak level in October 2022 by EUR 2.8 billion. The reduction in the loan stock was driven by a decrease in the proportion of short-term loans with a repayment period of up to 1 year. In March 2023, the year-on-year growth rate of the corporate loan stock was 3.6%.

Loans

In March 2023, new drawdowns of housing loans by Finnish households amounted to EUR 1.2 billion, which is EUR 690 million less than in the same period a year earlier. Buy-to-let mortgages accounted for EUR 100 million of the new housing loan drawdowns. The average interest rate on new housing loans rose from February to stand at 3.93% in March. At the end of March 2023, the stock of housing loans totalled EUR 107.5 billion, and its year-on-year growth rate was 0.1%. Buy-to-let mortgage loans accounted for EUR 8.7 billion of the housing loan stock. At the end of March, the household loan stock included EUR 16.9 billion of consumer credit and EUR 18.1 billion of other loans.

Finnish housing corporations drew down EUR 400 million of new loans. In March 2023, the stock of loans granted to housing corporations amounted to EUR 42.8 billion.

Deposits

At the end of March 2023, the stock of Finnish households’ deposits totalled EUR 109.9 billion, and the average interest rate on these deposits was 0.45%. Overnight deposits accounted for EUR 98.6 billion and deposits with agreed maturity for EUR 6.0 billion of the total deposit stock. In March, Finnish households made new agreements on deposits with an agreed maturity in the amount of EUR 1,040 million. The average interest rate on these new fixed term deposits was 2.40% in March.

For further information, please contact:

Ville Tolkki, tel. +358 9 183 2420, email: ville.tolkki(at)bof.fi,

Markus Aaltonen, tel. +358 9 183 2395, email: markus.aaltonen(at)bof.fi.

The next news release on money and banking statistics will be published at 10:00 on 31 May 2023.

Related statistical data and graphs are also available on the Bank of Finland website at https://www.suomenpankki.fi/en/Statistics/mfi-balance-sheet/.

[1] Excl. housing corporations.

[2] Excl. housing corporations.