Consumer Credit Overview

Consumer credit in Europe at end-2010

June 2011

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Consumer credit in Europe at end-2010

Consumer credit in Europe at end-2010 Summary (1/2)

With 1,105 billion in loans outstanding at end-2010 (see page 4), the European Union accounts for nearly one quarter of the world consumer credit market. Outstandings remain unevenly distributed, with five countries (UK, Germany, France, Italy and Spain) representing 76% of total outstandings (but 63% of the EU population). The EU can be divided into three zones: Northern Europe, with 56% of loan outstandings (and 41% of the EU population); Southern Europe (including France), with 37% of outstandings (39% of EU population); Eastern Europe, with 7% of outstandings (20% of EU population).

The European consumer credit market continued to contract in 2010 (see page 6), with outstandings falling 2.8% between December 2009 and December 2010: Northern Europe: -3.0% between 2009 and 2010 Southern Europe: -2.4% between 2009 and 2010 Eastern Europe: -3.9% between 2009 and 2010 The overall pattern conceals contrasting trends (pages 5 & 6): Some markets reported a strong decrease in outstandings, including Ireland (-17%), Spain (-11%) and the UK (-6%). In contrast, other markets have proved resilient, such as Slovakia (+9%) and Belgium (+2%).

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Consumer credit in Europe at end-2010

Consumer credit in Europe at end-2010 Summary (2/2)

At end-2010, average outstandings per inhabitant (page 7) in the European Union totalled 2,220, down 3% on the 2009 total (2,290). A decrease was observed in almost all European countries. Strong disparities exist within the EU, with outstandings per inhabitant ranging from 270 in Lithuania to nearly 4,500 in Ireland (although this figure contracted by a considerable 17% in 2010). The share of loan outstandings in total household debt is 17% in the EU. The ratio of outstandings to total annual household consumption (page 8) sheds light on the real share of credit in consumption. This indicator helps to eliminate the disparities resulting from differences in the standard of living from one country to the next. Outstandings at end-2010 account for 15.4% of total annual household consumption in EU27, compared with 16.4% in 2009. This metric supplies a structural assessment looking beyond todays crisis of: the maturity of certain countries: UK (22.4%), Bulgaria (21.7%) ; the lower use of consumer credit in other countries: France (13.2%), Italy and Portugal (12.3%). The French consumer credit market occupies a particular place in EU27: At end-2010, outstandings came to 151.7 billion, or 14% of the EU total. It is the third-biggest EU market in terms of outstandings, far behind the UK (249 billion) and Germany (229 billion) but ahead of Italy and Spain. The ratio of outstandings to total annual household consumption is 13.2% in France, compared with the 15.4% average for the EU. Loan outstandings account for 17% of the total debt of French households, identical to the EU average.

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Consumer credit in Europe at end-2010

Consumer credit in Europe at end-2010 Methodology

Source: The data for this study come from central banks and have been restated by the Asters consulting firm to ensure consistency in the markets and products being compared. Due to the lack of definitive annual figures for several countries, certain data are based on estimates. These data concern all lenders, banks and specialised credit institutions. Data on products include bank overdraft facilities but exclude mortgage loans. To compare eurozone and non-eurozone countries, outstandings in the non-eurozone countries were converted on the basis of average 2010 exchange rates. Some figures on outstandings and changes therein may differ from those in previous editions of this study, for two reasons in particular: revisions to the primary data provided by the central banks; fluctuations in the exchange rates used to convert outstandings in foreign currencies into euros. This second reason is particularly important, inasmuch as the financial crisis caused some extremely sharp currency movements. For France, the data were updated on the basis of outstandings published by Banque de France, restated for estimated outstandings in Overseas Departments, for a total 151.7 billion at end-2010. For the fourth consecutive year, this consumer credit overview of the 27 countries in the European Union endeavours to measure: 1- The level of outstandings per country at end-2010 2- Annual trend reported since 2009 3- The level of loan outstandings per inhabitant 4- The economic weight of consumer credit

We used two concepts to quantify consumer credit usage. Production: the total amount of credit issued in one year; this figure represents a flow. Outstandings: at a given point in time, the sum of the loans granted to individuals that still need to be repaid; this figure represents an inventory.

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Consumer credit in Europe at end-2010

1 Consumer credit in Europe at end-2010 1,105 billion in consumer credit outstanding at end-2010

249 229

152 114

Consumer loan outstandings for the 27 countries in the European Union came to 1,105 billion at end-2010. Outstandings were unevenly distributed: the top five markets in terms of outstandings (UK, Germany, France, Italy and Spain) accounted for 76% of total outstandings (higher than in 2009). These five countries are home to 63% of the EUs population. The European market can be divided into three zones: Northern Europe: with 56% of loan outstandings in the EU (41% of EU population) Southern Europe: 37% of outstandings (39% of population) Eastern Europe: 7% of outstandings (20% of population)
90,0

35,7 35,1 27,5 24,7

20,2 20,0 17,5 16,0 15,3 14,3 12,5 10,6 5,1 Czech Republic Hungary Ireland Sweden Denmark Portugal Finland Romania Belgium*

4,8 Bulgaria

3,4 Cyprus

2,8 Slovenia

2,5 Slovakia

1,1 Luxembourg

0,9 Latvia

0,9 Lithuania

0,7 Estonia

0,4 Malta

Germany

Italy

United-Kingdom

Greece

France

Poland

Netherlands

Sources: central banks, Asters

Austria

Spain*

*Asters estimates

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Consumer credit in Europe at end-2010

2.1 Consumer credit in Europe at end-2010 Outstandings rose in 8 countries only

Country
Slovakia Belgium* France Netherlands Poland Italy Germany Finland

Change 2009 / 2010

8.7% 2.0% 1.7% 1.2% 1.1% 0.9% 0.5% 0.4%

Consumer loan outstandings fell 2.8% between December 2009 and December 2010. The macro-economic environment remained unfavourable generally, with economic growth lacklustre in most Member States. Household consumption was curbed by the budgetary rigour policies introduced by a number of European countries in response to the sovereign debt crisis in Greece, Ireland and Spain. In addition, unemployment remains high (9.5% of the active population at the end of the year), denying some households access to credit. Of Europes top five markets in terms of outstandings, only France (+1.7%), Italy (+0.9%) and Germany (+0.5%) were resilient. With outstandings up 8.7%, Slovakia was a notable exception to the overall downward trend in the consumer credit market in Europe.

Sources: central banks, Asters

*Asters estimates

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Consumer credit in Europe at end-2010

2.2 Consumer credit in Europe at end-2010 2.8% drop in outstandings in EU27

Ireland, beset by a serious banking and budgetary crisis, reported the biggest fall in consumer loan outstandings in the European Union (-17%) behind Cyprus (-29%). Concerning new Member States: - the decrease in outstandings was particularly marked in Romania (-12%), the Czech Republic (-10%) and the Baltic states. - these negative trends contrasted significantly with the positive performance of the markets in Poland (+1.1%) and Slovakia (+8.7%, the highest increase in the EU). Outstandings were down 5.7% in the leading EU market, the UK.
Southern Europe Northern Europe Eastern Europe

-2,4% -3,0%

Changes are calculated on the basis of outstandings totals in local currency

-3,9%

Country
Bulgaria Austria Hungary Sweden Luxembourg Malta Greece EU27 Slovenia Portugal

Change 2009 / 2010

-4.3% -0.2% -0.3% -0.5% -0.8% -1.0% -2.5% -2.8% -2.9% -3.0% UK

Country

Change 2009 / 2010

-5.7% -8.4% -10.0% -10.0% -10.0% -10.2% -10.7%* -11.8% -17.0% -28.9%

Denmark Latvia Lithuania Czech Republic Estonia Spain Romania Ireland Cyprus
*Asters estimates

Sources: central banks, Asters

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Consumer credit in Europe at end-2010

3 Consumer credit in Europe at end-2010 Consumer loan outstandings per inhabitant (in euros)
At end-2010 average outstandings per inhabitant in the EU stood at 2,220, down 3.1% on 2009 (2,290). The EU consumer credit market is characterised by strong disparities between countries, mainly owing to differing levels of economic development: In Ireland, outstandings per inhabitant fell sharply (down 17% on 2009) but remained the highest in the EU at 4,470. Differences remain considerable in the eurozone. Outstandings per inhabitant are relatively high in Germany, at 2,800, but much lower in Italy (1,890) and Portugal (1,340). In most new Member States (joining since 2004) outstandings per head are under 1,000: Poland (940), Romania (710), Bulgaria (640). Poland and Slovakia were the only two countries in Eastern Europe to observe a rise in outstandings per inhabitant in 2010.
3 998 3 174

4 471

3 138

2 949

2 801

2 410

2 333

2 272

2 222

1 956

1 893

1 865

1 715

1 658

1 388

1 341

1 014

938

712

636

525

508

455

399

United-Kingdom

Luxembourg

Belgium*

Italy

Germany

Netherlands

Czech Republic

Denmark

Romania

Hungary

EU-27

Sweden

Ireland

Spain*

Portugal

Bulgary

Slovenia

Greece

France

Estonia

Austria

Poland

Latvia

Sources: central banks, Asters

*Asters estimates

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Consumer credit in Europe at end-2010

Lithuania

Slovakia

Finland

271

4.1 Consumer credit in Europe at end-2010 Ratio of consumer loan outstandings to household consumption in 2010
At end-2010 the ratio of outstandings to total annual household consumption was 15.4% in the EU compared with 16.4% a year earlier. The ratio increased sharply in Bulgaria and Slovakia. One of the sharpest drops was seen in Ireland, down from 28.4% at end-2009 to 24.6% at end-2010. In France, outstandings represented 13.2% of household consumption (compared with 12.6% at end-2009), a ratio that is considerably lower than the European average.
,4% ,7% 22 21 ,5% ,0% 20 20 ,4% ,2% 8% , 16 16 ,4% 5 ,3% 15 15 1 ,5% ,3% 14 14 ,8% 3 ,2% ,9% 13 1 ,3% 2 ,3% 12 12 1

,6% 24

,9% 10

,3% % 7% 10 9, 8 9,

% 9, 5

% % 8, 5 8, 0

% 6, 4

% 5, 1

Germany

Slovenia

United-Kingdom

Luxembourg

Netherlands

Denmark

Romania

Slovakia

Italy

Hungary

Greece

Austria

EU-27

Ireland

Finland

France

Poland

Bulgaria

Estonia

Portugal

Sweden

Latvia

Sources: central banks, Asters

Czech Republic

*Asters estimates

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Consumer credit in Europe at end-2010

Belgium*

Lithuania

Spain*

4.2 Consumer credit in Europe at end-2010 Trend in ratio of consumer loan outstandings to household consumption 2009/2010
European Union United-Kingdom United24,9% 22,4% 15,4%

Germany

16,4%

16,1%

15,8%

2009

2010

2009

2010

2009

2010

France

Italy

Spain
17,3%

13,3%

13,2%

14,5%

12,5%

12,3%

2009

2010

2009
Sources: central banks, Asters

2010
*Asters estimates

2009

2010

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Consumer credit in Europe at end-2010

Consumer credit in Europe at end-2010 Crdit Agricole Consumer Finance the European leader in consumer credit
With outstandings under management of 78.1 billion at end-2010, Crdit Agricole Consumer Finance is the European leader in consumer credit. Crdit Agricole Consumer Finance is present through its subsidiaries in 19 European countries (Germany, Austria, Belgium, Denmark, Spain, Finland, France, Greece, Hungary, Italy, Norway, Netherlands, Poland, Portugal, Czech Republic, UK, Slovakia, Sweden and Switzerland) and also in Saudi Arabia, Morocco and China. At end-2010, two-thirds of its outstandings under management came from international activities. Sofinco is a French brand of Crdit Agricole Consumer Finance.

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Consumer credit in Europe at end-2010

Consumer Credit in Europe at end-2010

Contact :

Crdit Agricole Consumer Finance D.P.C.I. H.0.2. - rue du Bois Sauvage - 91038 Evry cedex Tl. : + 33 (0)1 60 76 88 17 E-mail : presse@ca-cf.fr

All Crdit Agricole Consumer Finance s studies are available from www.ca-consumerfinance.com, Section Consumer Credit Overview

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Consumer credit in Europe at end-2010