Consumer Credit in Austria

PROSPECTS

Demand for credit expected to level out after recent strong growth

After strong growth in demand for consumer credit towards the end of the review period, the upward trend in gross lending is expected to slow considerably over the forecast period, but at the same time remain at a high level. Earlier in the review period only mortgages/housing was driven noticeably by ongoing low interest rates, while consumer credit stagnated in light of the country’s moderate economic performance and an uncertain future.

New law makes it easier to free oneself from debt

New regulations regarding personal bankruptcy were introduced in Austria in November 2017. After lengthy negotiations, the government finally agreed to shorten personal insolvency proceedings to a maximum five years, down from seven, and to abolish the minimum insolvency quota of 10% under certain conditions.

Card lending expected to remain the fastest growing category

Although still at a relatively low level when compared with other Western European countries, gross lending on cards saw strong growth over the review period, with this expected to continue over the forecast period, making card lending the best performing category in consumer credit.

COMPETITIVE LANDSCAPE

Traditional retail banks dominate consumer credit

Austrian consumers in need of a loan tend to still go to their bank and talk to a trusted advisor first, often not even comparing its credit terms and conditions with other lenders. Consequently, the four major retail banks, UniCredit Bank Austria, Erste Bank der oesterreichischen Sparkassen, Raiffeisen Zentralbank Österreich and BAWAG PSK, continued to dominate consumer credit in Austria at the end of the review period.

BAWAG to break Santander’s quasi-monopoly in instalment plans

A category which is expected to benefit from Austrian consumers’ increasing openness to consumer credit for a wider array of purposes over the forecast period is durables lending, thanks largely to instalment plans.

Files are delivered directly into your account within a few minutes of purchase.