In 2020

Default ratio of non-financial corporations dropped while the balance of credit granted and the number of borrowers increased

According to the data provided by the Bank of Portugal, at the end of December 2020, the balance of credit granted to non-financial corporations (NFC) located in the Autonomous Region of Madeira stood at 1,941.5  million euros, up by 28.6% over the end of 2019, confirming the growing trend which took place most of the year. After 10 years of successive drops, the balance of loans granted increased and recorded a value close to the one observed at the end of 2016. The number of NFC with loans grew from 3.6 thousand and 5.3 thousand between the end of 2019 and the end of 2020, with the latter being the highest value since June 2012. The default ratio of this type of corporations dropped to 3.6%, remaining 0.3 percentage points (p.p.) above national average. 

In the household and Non-Profit Institutions Serving Households (NPISH) sectors, the balance of credit granted at the end of the reference period amounted to 3,160.3 million euros, down by 2.4% from the end of December in the previous year. 67.4% of that balance was related to the “housing” segment and the remaining 32.6% to “consumption and other purposes". Compared to December 2019, the balance of loans granted in the first segment increased by 1.3%, while in the case of the second segment, there was a 9.3% drop. It is the first time in 11 years that the balance of credit related to the “housing” segment increased.

Household and NPISH debtors amounted to 100.4 thousand as of December 2020, showing a downward trend over the past year, driven by the decrease in borrowers for “consumer and other purposes”. The overall decrease was 1.2%, and in this particular segment, it reached 2.2%. In the “housing” segment there was an increase of 1.1%.

Overdue loans in the housing segment did not exceed EUR 16.6 million, representing a ratio of overdue loan ratio of 0.8%, 0.2 pp above the national value. Compared to the end of 2019 this ratio dropped by 0.6 pp in the Region and by 0.2 pp in the country.

The percentage of borrowers (Households and NPISH) with overdue loans stood, by the end of 2020, at 7.8% in the Autonomous Region of Madeira and by 8.5% in Portugal. Compared to a year before it dropped by 0.6 pp in the Region and by 0.4 pp in the country.

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