In 2021

Default ratio of non-financial companies dropped while the balance of credit granted increased

According to the data provided by the Bank of Portugal, at the end of December 2021, the balance of credit granted to non-financial companies (NFC) located in the Autonomous Region of Madeira stood at 2,040.9 million euros, up by 5.3% over the end of 2020, confirming the growing trend which took place most of the year. This is the second consecutive year in which this indicator has grown, after ten years of successive decreases. The number of NFC with loans dropped from 5.3 thousand to 5.2 thousand between 2020 and 2021 and remains close to the values recorded since the end of 2007 to the end of 2012, a period when this indicator stood between 5.1 and 5.4 thousand (historical maximum).

The default ratio of this type of company dropped from 3.6% to 2.0%, remaining 0.3 percentage points (pp) below the national average (2.3%). Madeira, for the first time since December 2010, has a lower NFC default ratio at the end of the year than Portugal.

The percentage of borrowers in the NFC sector with overdue loans at the end of 2021 was 14.0%, being lower than the national figure (15.0%). Compared to December 2020, this indicator decreased by 1.2 percentage points (pp) in the Region and by 1.0 pp in the Country.

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 3,214.0 million euros, which grew by 1.7% from the end of December in the previous year. 67.7% of that balance was related to the “housing” segment and the remaining 32.3% to “consumption and other purposes". Compared to December 2020, the balance of loans granted in the first segment increased by 2.1%, while in the case of the second segment, it just rose by 0.7%. It should be noted that, in the "housing" segment, 2021 corresponds to the second consecutive growth seen in the year-end balance of loans granted in the last 11 years.

Household and NPISH borrowers amounted to 99.4 thousand as of December 2021, showing a downward trend over the past year (-1.0%), since the number of borrowers in the “consumer and other purposes” remained unchanged.

Overdue loans in the housing segment did not exceed 14.5 million euros, representing a ratio of overdue loan ratio of 0.7%, 0.2 pp above the national value. Compared to the end of 2020, this ratio dropped by 0.1 pp in the Region and by 0.1 pp in the country.

The percentage of borrowers (Households and NPISH) with overdue loans stood, by the end of 2021, at 6.3% in the Autonomous Region of Madeira and by 7.1% in Portugal. Compared to a year before it dropped by 1.5 pp in the Region and by 1.4 pp in the country.

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