The banks accelerated the granting of new credit for the home purchase to the highs of 2010, before the entry into force of the new rules for housing loans.
Portuguese banks have once again accelerated the granting of home loan financing in June before the entry into force of the new rules on housing credit. According to data from the Bank of Portugal, released on Tuesday, August 14, financial institutions financed 990 million euros to purchase a home in the sixth month of the year. This is the strongest month in terms of granting new credit in eight years.
Financing for the purchase of the house in a maximum of eight years
In the first six months of the year, new housing loans amounted to 4,774 million euros, with bank financing for home purchase maintaining a strong pace of growth. This amount represents an increase of around 25% compared to the 3,821 million lent for this purpose in the same period last year.
Banks are still betting on this credit segment, despite warnings from Banco de Portugal to avoid overruns in the past and before the new rules came into effect in early July. In February, the Bank of Portugal issued a set of recommendations that impose some limits on the granting of new loans, namely the maturity of credits and the ratio that can finance the value of the property.
Even if the measures are in the form of a recommendation, if they do not follow these rules, the banks will have to explain to the supervisor why they do not. “If we do not respect it, we can move on to the next level: an injunction,” said Carlos Costa, recently in Parliament.
As in May, the credit stock increased again. It reached 92,837 million euros, up from 92,807 million in the previous month.
Unlike housing loans, which registered strong growth, loans for consumer credit and other purposes, the granting of loans slowed down at the end of May. Consumer credit decreased by € 10 million to € 419 million, while credit for other purposes reached € 146 million, compared to € 162 million in May.
For companies, credit increased compared to May. New operations of up to 1 million euros amounted to 1,545 million euros in June, compared to 1,535 million in May. In the first half of the year, banks financed 8,651 million euros for small and medium-sized enterprises, a slight increase of 2.45% over the amount financed for this purpose in the same period last year.
Operations above one million euros totaled 1,117 million euros, up from 1,019 million in the previous month. The balance of the half was also positive, with banks financing 6,498 million euros, compared to 5,483 borrowed by June 2017.