Consumer credit at full throttle

The dynamism of the consumer credit market was consolidated in the first half of the year. Despite an uncertain economic backdrop, banks posted solid, even record results in Q2 2022, with personal loans and revolving credit in particular running at full speed.

Personal loans and revolving credit on the rise

Banks have been filling up on mortgages and taking advantage of this to equip their customers with consumer credit. More specifically, Crédit Mutuel saw its outstanding consumer credit rise by 6.8% in the first half of 2022, to 48.8 billion euros. Crédit Agricole's increased by 4.9% to 96.6 billion euros at the end of June. At BPCE, outstandings stood at 37.4 billion euros, marking an increase of 5.8% between June 2021 and June 2022.

Personal loans are one of the fastest-growing types of consumer credit. In March, financing rose by +15.9% compared with the same period a year ago. Revolving credit experienced the same dynamic, up +13.3% on March 2021. By contrast, growth in new vehicle financing was more mixed, due to supply difficulties. It rose by +2.1% in the 1st quarter.

An uncertain macroeconomic and geopolitical context

The current situation, marked by the war in Ukraine and inflation, could put the brakes on consumer credit applications. According to the Conseil d'Analyse Economique, rising inflation is impacting the budgets of a large proportion of the French population. With a rate of 5% unseen since 2008, the general rise in prices has reached record levels, particularly in agriculture and energy. As a result, households that can no longer draw on their savings are more reluctant to take out a loan. This behavior is undermining the performance of the credit business.

Inflation is also having an impact on consumer morale. Since the beginning of the year, the Insee indicator that measures their confidence in the economic situation has been falling steadily. In July, it dropped a further 2 points to 80, well below its long-term average of 100. The statistics institute notes that the French are pessimistic on all fronts, which sends out the wrong signal for consumption, the main driver of growth in France.

A study published in June by Allianz Trade Report adds that "the lack of trust would cost French consumption 20 billion euros" in 2022, representing around 440 euros per household.

Thus, in an uncertain macroeconomic and geopolitical context, households may be moderating their purchasing decisions. This trend is already visible. In fact, in July, the proportion of consumers who felt it was a good time to make major purchases fell for the 7th consecutive month.