Either, Portuguese households suddenly have become better off this year, or the banks have returned to the 'good old days' of handing out personal loans, without being too fussy as to the recipient.
Banks and financial institutions provided close to €3.7 billion in consumer credit in the first half of 2018, a record and an average of €20 million per day in a country whose population is just over 10 million people.
The Bank of Portugal came up with guidelines to choke-off mortgage lending but Carlos Costa’s weak, ‘advisory only’ lending guidelines also have failed as the country’s citizens pile on consumer and mortgage debt in the certainty that there will never be another recession and all jobs are safe.
This June, credit institutions granted close to €631 million in personal loans. This is down on May's blockbusting €669 million.
The €3,688 million lent in the first six months of this year represents a record for the Bank of Portugal's statisticians, since 2013 anyway, when records began.
The Bank of Portugal puts the splurge down to 'an improvement in the country's and households' economic outlook which has contributed to the sharp growth in lending levels, as they feel a greater incentive to make financial commitments to the banks.'
Car and other personal loans contributed most to growth. In the first half of the year, banks and financial institutions handed out €1.54 billion in car loans, 19% higher than in the same period last year.
Portuguese consumers spent another €1.5 billion of borrowed money on ‘other personal loans,’ including loans to buy holidays and home appliances. This category was 21.2% up on last year.
Then there are credit cards and overdrafts where Portuguese citizens were handed a further €531 million in the first six months of this year, a growth of 4.7% over 2017.
The highest growth area was for education, healthcare, renewable energy systems and the leasing of equipment, where the spend was €33.9 million, 38% above the first half of 2017.
