The outstanding volume of foreign currency loans (FX lending) to private households fell by € 1.5 billion or -17.3% adjusted for exchange rate effects in 2023. During the 4th quarter alone, the amount fell by € 300 million or by -4.0% compared to the preceding quarter. At year-end 2023 in absolute terms the outstanding volume for foreign currency loans was € 7.5 billion; at the end of 2022 the outstanding amount stood at € 8.6 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 € 41.9 billion or -88% 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 2023; at the height of the foreign currency loan boom this share was 31.8%. 98.4% 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 2023, the Swiss franc has appreciated by 78.5% (with an 10.6 percentage point increase during 2023 alone). These were the findings of the FMA’s Survey on Foreign Currency Loans in Q4 2023.
Foreign currency loans form a timely reminder about prudent and sustainable granting of loans
“Anyone who speculatively took out a loan in Swiss francs during the boom years for foreign currency loans, ultimately has to repay up to 80% more that originally planned due to the exchange rate effects along,” remarked the FMA’s Executive Board Members Helmut Ettl and Eduard Müller: “Moreover, a large proportion of foreign currency loans were sold by the banks as bullet loans with repayment vehicles. This means that across the term of the loans only the interest on the loan is repaid, with the bullet repayment of the loan amount taken out intended to be generated via the capital market from an investment product taken out and serviced concurrently. As a rule, this speculation also turned out to be unsuccessful. This demonstrates the importance of a sustainable policy for the granting of credit, that focuses on the ability of the borrower to repay it, rather than the property that serves as collateral on the mortgage.“
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-6006
+43/(0)676 882 49 516