Consumer Credit in Austria

PROSPECTS

Demand for credit expected to weaken despite low interest rates

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 reasonable 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.

Card lending expected to record the strongest growth as players increasingly offer revolving credit

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

Durables lending to continue to record strong growth driven by activities of bankers and lenders

Durables lending achieved the strongest growth in 2019. After mediocre performances over the early part of the review period due to low consumer confidence, buyers returned at the end of the period, encouraged by strong marketing activities by retailers and their banking partners, both of which were keen to increase profits and sales after the lean period, largely driven by instalment plans.

COMPETITIVE LANDSCAPE

Traditional retail banks lead consumer credit

Austrian consumers in need of a loan tend to still go to their bank and talk to a trusted adviser 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 Bank International and BAWAG PSK, continued to lead consumer credit in Austria at the end of the review period.

Strong growth for direct banks

Direct banks such as Easybank AG, N26 Bank GmbH and Hello bank! By BNP PARIBAS are registering strong growth due to their inexpensive salary accounts. However, credit is a much more sensitive topic among consumers which is why their impact here has been much smaller so far.

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

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

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