Written by Empruntis on 23/02/2021
Unsurprisingly, the balance sheet of consumer credit in 2020 is unprecedented since the financial crisis of 2008. The fall over the past year, marked by the health crisis and the suspension of production during the first confinement, is 11.5 % according to the French Association of Financial Companies. The LOA held up better than the conventional credits.
An irreparable second quarter of 2020
No burst at the end of the year to catch up with a bearish balance sheet due to the Covid-19 pandemic. In December, the production of consumer credit fell by 6.8%, and the decline is 7.6% in the fourth quarter. Insufficient to pull the “gadget” of the year 2020 below the 10% mark (11.5%), the fault of a heavily impacted second quarter (-35.4%) that the third could not compensate despite its rebound (+ 2.9%). Successive confinements, administrative bans, annulment of weddings and vacations, difficulties specific to the automotive market … there are many reasons for this significant drop in the production of consumer loans.
Revolving credit in great decline
It is the personal loan that has suffered the most from Covid-19 (-18.5%), ahead of revolving credit (-15.5%). We have to go back to 2009, the day after the financial crisis, to find traces of such a recession. And again: the fall that year had not been so strong for the family of revolving loans! They still weighed 37% of total production in 2010, compared to less than 20% now. On the side of allocated credits, the loan for home improvement and household equipment goods limited the breakage (-2.8%), taking advantage of the shift in consumption towards the interior comfort of housing.
Auto financing: the LOA less affected
With a drop in new registrations of more than 25% (-3.7% for the second-hand market), we did not expect a famous balance sheet for auto credit in 2020. It has held up rather well if the ‘we believe the data from the HCSF: -10.3% for the financing of a new car and -7.3% for a used model. In detail, the classic auto loan still fell 22.3% (new) and 10.8% (occasionally), confirming the shift towards leasing with option to buy. New LOA only fell by 6.6%, while second-hand LOA continued to grow strongly (+ 15%) despite the health crisis!
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