The volume of foreign currency loans (FX lending) to private households fell by 4% during the second quarter adjusted for exchange rate effects, and now stands at €5.63 billion. This amount makes up 3.2% of all loans to private households in Austria. These are the findings from the latest survey conducted by the Austrian Financial Market Authority (FMA) on FX lending.
Since the FMA imposed a ban on the granting of new foreign currency loans in Autumn 2008, the outstanding volume has fallen by € 43.7 billion or 91% adjusted for exchange rate effects. At the height of the FX lending boom in 2006 almost one-third of all loans to private households (32%) were denominated in foreign currencies. This position was a risk for the entire Austrian banking sector during the Global Financial Crisis of 2008.
Practically all remaining FX loans (98.8%) are denominated in Swiss francs (the remainder is almost exclusively in Japanese yen). During the 2nd quarter, the Swiss franc exchange rate was around 0.9347 CHF to the Euro. The Swiss franc has appreciated by 77% since the start of 2008.
FMA estimates expect that the majority of the remaining bullet FX loans will mature between 2029 and 2033. Credit institutions are required to hold a meeting with affected borrowers at least annually. Borrowers are strongly urged to make use of this opportunity to meet with their lender.
Information about foreign currency loans to private households and the associated risks can be found here. The FMA Minimum Standards on FX Loans can be downloaded here.
Journalists may address further enquiries to:
Boris Gröndahl (FMA Media Spokesperson)
Telephone: +43/(1)249/59-6010
Mobile: +43 676 8824 9995
E-Mail: [email protected]