In January 20201, drawdowns of student loans totalled EUR 308 million, which is 8% more than in the year-earlier period and more than ever before month-on-month. The average interest rate on student loan drawdowns was record low, at 0.34%, compared with 0.48% in January 2019. Of the loans drawn down, 90% were linked to Euribor rates and 10% to banks’ own reference rates. The average interest rate on the Euribor-linked loans was 0.27% and that on the prime rate-linked loans was 0.88%.

Fuelled by the high volume of drawdowns, the stock of student loans grew to well over EUR 4 bn, reaching EUR 4.3 bn at the end of January 2020. Since the student financial aid reform of 2017, the student loan stock has grown by EUR 1.7 bn. In January 2020, the annual growth rate of the stock was 17%.

Growth in the student loan stock is not only due to higher loan amounts granted as a result of the student financial aid reform. The number of borrowers has also increased, which has been reflected in recent years as a notable rise in the total number of  persons with outstanding student loan debt. According to the statistics of the Social Insurance Institution of Finland (Kela), in the academic year 2018–2019, the number of persons with outstanding student loan debt was 435,000, which is 80,000 persons more than three years earlier. The low level of interest rates has also supported the popularity of student loans.

Loans

In January 2020, households’ drawdowns of new housing loans amounted to EUR 1.4 bn, up by EUR 60 million on the corresponding period a year earlier. At the end of January 2020, the stock of euro-denominated housing loans totalled EUR 100.3 bn and the annual growth rate of the stock was 2.6%. Household credit at end-January comprised EUR 16.7 bn in consumer credit and EUR 17.7 bn in other loans. Drawdowns of new loans by non-financial corporations (excl. overdrafts and credit card credit) amounted in January to EUR 2.1 bn. The average interest rate on new corporate-loan drawdowns declined from December 2019, to 1.84%. At the end of January, the stock of euro-denominated loans to non-financial corporations totalled EUR 92.6 bn, of which loans to housing corporations accounted for EUR 34.9 bn.

Deposits

At the end of January 2020, the stock of deposits of Finnish households amounted to EUR 95.0 bn and the average interest rate on the deposits was 0.10%. Overnight deposits accounted for EUR 82.1 bn and deposits with an agreed maturity for EUR 4.7 bn of the deposit stock. In January, households concluded EUR 0.3 bn of new agreements on deposits with an agreed maturity, at an average interest rate of 0.14%.

1 The loan amount for the spring semester became available for drawdown in January.

Key figures of Finnish MFIs' loans and deposits, preliminary data

  November, EUR million December, EUR million January, EUR million January, 12-month change1, % Average interest rate, %
Loans to households2, stock 134,443 134,425 134,706 3,1 1,43
    - of which housing loans 100,349 100,354 100,269 2,6 0,89
Loans to non-financial corporations2, stock  91,045 90,976 92,627 9,1 1,31
Deposits by households2, stock 99,559 98,920 99,040 5,9 0,09
Households' new drawdowns of housing loans 1,722 1,450 1,361   0,73

* Includes euro-denominated loans and deposits to euro area.
1 Rate of change has been calculated from monthly differences in levels adjusted for classification and other revaluation changes.  
2 Households also include non-profit institutions serving households; non-financial corporations also include housing corporations

For further information, please contact:

Markus Aaltonen, tel. +358 9 183 2395, email: markus.aaltonen(at)bof.fi,
Ville Tolkki, tel. +358 9 183 2420, email: ville.tolkki(at)bof.fi.

The next news release will be published at 1 pm on 31 March 2020.

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

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