Loans to Households YoY

Loans to Households YoY is the annual % change in household lending, published monthly by the European Central Bank (ECB). It covers loans by euro area MFIs, which are banks and money market funds, to households, which are individuals plus unincorporated businesses and related nonprofits. Adjusted means sold or securitised loans, still owed by borrowers, are added back, and cash-pooling positions are removed. It excludes unadjusted stocks, nonbank loans, foreign borrowers, monthly new volumes and deposits, and it has no target level.

The Monetary developments in the euro area release appears monthly, about 4 weeks after the reference month, at 10:00 Frankfurt time under an advance calendar. Each edition reports end-of-month stocks (outstanding amounts), monthly flows (transactions) and annual % rates. It appears with broad money M3 and narrow money M1, deposits by sector, other loan lines, charts and annex tables. Dates shift around year-end holidays, figures are revised in later releases, and data use seasonal and calendar adjustment for comparability.

Three loan purposes drive the rate, and mortgages dominate the stock.

• Lending for house purchase: loans for buying, building or refurbishing homes for own use or rental, including land.
• Credit for consumption: loans for personal goods and services, such as vehicles, furniture, appliances, holidays and card credit.
• Other lending: loans for business needs, financial investment, debt consolidation or education, including sole proprietors.

In the December 2022 edition, released January 27, 2023, adjusted household loans grew 3.8%, down from 4.1%, while corporate loans fell to 6.3% from 8.3%. Private-sector loans slowed to 5.3% from 6.2%, showing household and corporate credit can diverge sharply. Mortgages, at EUR 5215 billion of EUR 6632 billion, grew 4.4% and carried the headline rate. Consumer credit grew 3.1%, other lending was 0.2% and sole-proprietor loans fell 0.6%, with adjusted and unadjusted both at 3.8%.

1. Transactions: Monthly change in stocks minus reclassifications, write-downs and exchange-rate effects, leaving only true lending flows. Here write-downs reflect impaired loans, reclassifications reflect reporting changes and exchange effects reflect currency moves.
2. Adjusted loans: Add back derecognised loans (sold or securitised but still serviced) and remove cash-pooling positions. Cash-pooling covers corporate cash-management overdrafts, not genuine financing, and it is tiny for households. The sales adjustment began in December 2008, cash pooling joined in July 2016, and the series runs back to 2003.
3. Index of notional stocks: Chain adjusted transactions into a dimensionless index starting at 100; its level has no euro value. For example, an index of 112.0 with EUR 8 transactions on EUR 6800 stocks becomes 112.132.
4. Annual growth rate: Compare the index with its value 12 months earlier as a % change. For example, 112.132 against 108.0 a year earlier gives 3.8%.
5. Seasonal adjustment: Adjust for seasonal and end-of-month calendar effects with X-12/X-13 ARIMA and multiplicative decomposition. Factors cover 12 months, re-estimated yearly and checked monthly.