Consumer credit remains very dynamic in French banks

French banks posted solid and even record second quarter results. And this despite a rather uncertain global economic environment. A significant part derives from the good dynamics of their retail branch. And for good reason: not only have they stocked up on mortgages, but they’ve also equipped their customers well with consumer credit.

Thus, on the side of Crédit Mutuel, which notes that the financing of its clients’ projects “increased” to “illustrate its support for the recovery”, the outstanding consumer credit grew by 6.8% in the half year, to 48 , 8 billion euros.

The other two mutual banking groups are also showing good momentum. Crédit Agricole’s outstanding consumer credit increased by 4.9% at the end of June, to € 96.6 billion (compared with € 93.9 billion in December). At BPCE, it increased by 5.8% to 37.4 billion euros, between June 2021 and June 2022.

Rebound in revolving credit

The other large French banks are not excluded. BNP Paribas recorded a 4.9% increase in its loans (€ 11.3 billion), while La Banque Postale recorded a 4% increase, to € 5.5 billion. Société Générale also grew, driven in particular by the enormous success of Boursorama (+ 32%).

The performance of the banks in the half year is also higher than the average increase recorded by the Banque de France (3.7%), for a total of 197 billion euros. The Association of French Financial Firms (ASF), which represents specialists in the consumer credit sector, also notes “a clear progression” in the market, which has returned to pre-pandemic levels.

In detail, the ASF recorded a strong rebound in revolving loans (+ 24.7% between February and May) and personal loans (+ 21%). Consumer credit is also driven by the financing of used cars (+ 14.3%). That of the new vehicle is instead in free fall.

Risk of overturning

However, the good performance of this lending activity since the beginning of the year is part of a macroeconomic and geopolitical context that could very well reverse the trend. According to the Conseil d’Analyse Economique, the budget of a large part of the French people is being severely tested by rising inflation. As a result, rising interest rates can cause families to think twice about taking out a loan.

Furthermore, household morale is plummeting month after month: in July, the percentage of French people who believe it is a good time to make major purchases fell for the seventh consecutive month. This does not bode well for consumption, the primary driver of French growth. In its latest projections, OFCE estimates that GDP is expected to grow by 2.4% in 2022 and then by 1% in 2023, a long way from the 6% rebound observed in 2021.

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