The outstanding volume of foreign currency loans (FX lending) to private households fell by € 1.6 billion or -16.0% adjusted for exchange rate effects in 2022. During the 4th quarter alone, the amount fell by € 330 million or by -3.6% compared to the preceding quarter. At year-end 2022 in absolute terms the outstanding volume for foreign currency loans was € 8.6 billion; at the end of 2021 the outstanding amount stood at € 9.8 billion. In total, since the introduction of the ban on granting of new loans in the autumn of 2008 and the accompanying measures to limit risk, the outstanding volume of foreign currency loans (FX lending) to private households has fallen by € 40.4 billion or -85% adjusted for exchange rate effects. The proportion of loans denominated in foreign currencies to all outstanding loans to private households therefore stood at only 4.7% at year-end 2022; at the height of the foreign currency loan boom this share was 31.8%. 97.9% of the volume of the amount owed for loans in foreign currencies was for loans denominated in Swiss franc (CHF), with the remaining amount almost exclusively in Japanese yen (JPY). Since the start of 2008 until year-end 2022, the Swiss franc has appreciated by 67.9% (with an 8 percentage point increased alone during 2022). These were the findings of the FMA’s Survey on Foreign Currency Loans in Q4 2022.
Foreign currency loans form a timely reminder about prudent and sustainable granting of loans
“Anyone who speculatively took out a loan in Swiss franc during the boom period for foreign currency loans, is ultimately required to bear an outlay of up to two-thirds more for repayment than they had originally planned for. This shows how important a sustainable loan origination policy is that focuses on the borrower’s ability to repay the loan, rather than the mortgage-backed loan using the property as security,” remarked the FMA’s Executive Directors Helmut Ettl and Eduard Müller: “Furthermore, a large proportion of the foreign currency loans were concluded with bullet repayment vehicles. This means that only the interest on the loan was paid across the term of the loan, with the bullet repayment of the loan amount taken out intended to be generated via the capital market from an investment product taken out serviced concurrently. As a rule, this hasn’t worked out: only in around three out of every loans that were repaid in 2021 did the repayment vehicle actually generate the repayment amount. And furthermore, in the case of less than half of the borrowers, for whom the repayment vehicle was not sufficient, were they able to make up the arising coverage gap by means of additional assets.”
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson):
+43/(0)676 882 49 516