Consumer Credit in Sweden

PROSPECTS

Tougher amortisation in mortgages/housing might benefit non-card lending

The stricter amortisation rules imposed on Swedish consumers in 2016 and 2018, while mortgages were still growing very positively, seemed to cause minor initial disruption, which, at the end of the review period, had a positive impact on consumer credit.

Household indebtedness – a concern or not?

While mortgages/housing contributes to the lion’s share of an average Swede’s indebtedness, a minor share is contributed by other types of loans. The average Swede is constantly becoming more indebted, although it remains debatable how big a risk this is on the larger-than-the-individual level.

Education lending highlights demographic changes

As of 2018, education remains a key investment for many Swedes, reflected in the significant share of education lending within the entire non-card lending balance. According to the Swedish Board of Student Finance, education lending impacts a high number of Swedes.

COMPETITIVE LANDSCAPE

Four big banks lead

The big four banks in Sweden, Handelsbanken, Nordea, SEB and Swedbank, are trusted and long-term household brand names. Despite being regarded as the dinosaurs of consumer lending and scapegoats for all that some consumers think is wrong in banking, they remain key players within the Swedish consumer credit landscape.

Marginal players increase their share

While the main players maintain a stable position, they also suffer from legacy issues such as their workforce, which, despite cuts, remains higher than the leadership of a typical mainstream bank would like it to be. Legacy issues have thus created a landscape for more fast-moving players with a greater focus on consumer credit or credit cards than the giants have had.

Banking and retailing mingle

Among the major grocery retailers in Sweden, ICA with its ICA Banken and Coop with its MedMera Bank, instead of offering cobranded credit cards with a major bank, are bank operators with standard financial services offered such as payment cards including credit, debit and store cards, insurance, funds and lending.

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