The total amount that Portuguese banks have granted in housing loans fell in July for the first time since October 2018, according to data from the Bank of Portugal published on Monday. Early loan repayments, at a time when many Portuguese received holiday allowances, help explain this trend, along with lower demand for new loans.

According to the Bank of Portugal, “at the end of July 2023, the total amount of housing loans amounted to 99.3 billion euros, 100 million euros less than in June.” “In relation to July 2022, loans for this purpose decreased by 0.1%. Since October 2018, a negative annual variation rate for mortgage loans has not been observed ”, indicates the financial supervisor.

This evolution reflects the increase in early repayments and the slowdown in demand for mortgage loans”, says the Bank of Portugal.

Consumer loans (or personal loans) reached 20.9 billion euros at the end of July, the same as in June. “In annual terms, this value translates into a growth of 4.0% compared to July 2022 (3.8% in June),” adds the supervisor.

And the amount of loans granted by banks to companies amounted to 73.7 billion euros, at the end of July 2023, 400 million euros less than in June. “In relation to July 2022, the amount of these loans decreased by 2.6%, a similar evolution to that observed in June (-2.7%),” says the Bank of Portugal.

Deposits increase compared to the previous month but fell 3.4% compared to July 2022

Regarding deposits, at the end of July 2023 the stock of individual deposits in resident banks amounted to 176.2 billion euros, 1.3 billion euros more than in June.

As in the previous month, agreed term deposits contributed the most to this evolution, with an increase of 1,000 million euros in July, while demand deposits increased only 300 million euros. Deposits from individuals had already increased the previous month, after monthly reductions in the first five months of the current year”, affirms the Bank of Portugal.

Despite this positive evolution, individual deposits in resident banks decreased by 3.4% compared to July 2022, adds the financial supervisor.