Commentary on MFI interest rates
December 2024
Interest rates on new business
Interest rates on new deposits of households recorded the largest change for deposits with agreed maturity in December. As regards non-financial corporations, overnight deposits saw the largest change.
The interest rate on household deposits with agreed maturity declined by 0.12 percentage point to 3.20%. The interest rate on overnight deposits dropped slightly to 1.19%. The interest rate on current account deposits rose to 0.15%. The interest rate on deposits redeemable at notice increased slightly to 1.90% (the only rate to include, besides the household sector, deposits of non-financial corporations, which are negligible in this category).
The rate on deposits of non-financial corporations with agreed maturity fell to 3.28%. The interest rate on overnight deposits decreased by 0.25 percentage point to 0.99%. The interest rate on current account deposits declined to 0.62%. Deposits with agreed maturity of up to one year (which as a rule account for 100% of all deposits with agreed maturity in this sector) were remunerated at a lower rate (3.28%).
Chart 1 – Interest rates of commercial banks on CZK deposits held by Czech residents – new business
Source: ARAD data series system
Within interest rates on new loans to households, the biggest change was recorded for other loans in December. Interest rates on loans to non-financial corporations recorded the biggest change for loans of over CZK 30 million.
The overall interest rate on consumer credit, loans for house purchase and other loans decreased to 5.76%. The interest rate on consumer credit rose month on month to 8.63%. The interest rate on loans for house purchase fell to 4.71%. The interest rate on building society loans was flat at 5.77%, unchanged from November. The interest rate on mortgage loans decreased to 4.63%, down by 0.68 percentage points on a year earlier. The rate on other loans picked up by 0.23 percentage point to 5.55%. The interest rate on overdrafts and revolving loans decreased to 15.11%. The interest rate on credit cards fell to 17.29%.
Interest rates on new loans to non-financial corporations (excluding overdrafts, revolving loans and credit cards) increased to 5.75%. The rate on loans of up to CZK 7.5 million fell to 5.89%. The rate on loans of over CZK 7.5 million and up to CZK 30 million rose to 5.53% and the rate on new loans of over CZK 30 million increased by 0.27 percentage point to 5.77%. The interest rate on overdrafts, revolving loans and credit card loans decreased to 5.92%. The interest rate on overdrafts rose slightly to 6.09%.
Chart 2 – Interest rates of commercial banks on CZK loans provided to Czech residents – new business
Source: ARAD data series system
Interest rates on outstanding amounts
The average interest rates on outstanding amounts of deposits of households changed by just a few tenths of a percentage point in December. More pronounced changes were recorded for non-financial corporations.
The average changes in interest rates on outstanding amounts of loans to households were just a few basis points in December. Interest rates on outstanding amounts of loans to non-financial corporations saw similar changes.
The overall interest rate on loans to households increased to 4.41%. The interest rate on loans for house purchase also rose, reaching 3.57% (with the rate on outstanding amounts of mortgage loans picking up to 3.42%). The rate on consumer credit dropped marginally to 8.72% and the rate on other loans increased to 4.71%.
The average interest rate on loans to non-financial corporations fell to 5.47%. The rate on loans with maturity of up to one year decreased to 5.99%. The rate on loans with maturity of over one year and up to five years declined to 6.28%. The rate on loans with maturity of over five years dropped to 5.00%.
Notes:
- Interest rate statistics are based on Regulation of the European Central Bank on interest rates applied by monetary financial institutions to deposits and loans vis-à-vis households and non-financial corporations (ECB/2013/34) (pdf, 1 MB).
- Interest rates are converted to an annual basis and quoted in percentages per annum. They are the average interest rates for the entire Czech banking sector in CZK in the given month.
- The concept of new business and outstanding amounts
- In the case of specific indicators – overnight deposits, deposits redeemable at notice, bank overdrafts, revolving loans and credit card loans – the concept of new business is extended to the whole outstanding amount.