Investment Loan Debt Reaches Kc151 Billion

Prague, Sept 6 (CTK) – The debt of Czech companies to non-banking financial institutions reached Kc151.8bn at the end of the first half of this year, which is a 15.8 percent annual rise, according to statistics of the non-banking register of client information.


The debt volume increase was affected mainly by the number of companies with loans growing by 11 percent to nearly 70,000 at the end of June.


Investment loan is the most popular product, accounting for 39 percent of the overall volume.


The volume of investment loans increased annually by a quarter, or Kc12bn, the non-banking register executive director Jiri Rajl said.


The favourable economic situation encourages companies to expand their capacities, Rajl said.


Most companies do not have problems paying off their debts, and the share of non-performing loans in the total volume was a mere 0.8 percent at the end of June, he added.


Finance leasing was the second most popular loan type with a 31 percent share in the total volume. Operating leasing followed with 16 percent.


The number of companies with loans at non-banking financial institutions grew year-on-year in all the Czech Republic’s regions. The Plzen Region reported the largest growth of 14.2 percent, while the Karlovy Vary Region registered the smallest hike of 7.6 percent.


The volume of non-performing loans, where companies did not pay three consecutive instalments, rose yr/yr by Kc300m to almost Kc1.3bn.


A total of 4.4 percent of companies with loans had a debt in default risk at the end of H1.


The average non-performing loan was Kc416,000. The largest share of companies not paying off their debts was in Prague (6.5 percent), while the smallest share was in the Zlin Region (2.3 percent).


The average debt per company was Kc2.2m in June, growing by 4.3 percent in annual comparison. The volume increased in all the regions except the Hradec Kralove Region where it declined by Kc15,000.