Netherlands Retail Banking: Opportunities and Risks to 2023

Netherlands Retail Banking: Opportunities and Risks to 2023

Summary

The Netherlands’ total loan balances outstanding (including credit card balances, personal loan balances and residential mortgage balances outstanding) recorded a CAGR of 0.9% during 2014-18, to reach €737.9bn ($848.1bn) in 2018. The country’s household debt fell within the top 10 countries globally in 2018. The majority of the Dutch loan balances outstanding are from home loans; residential mortgage balances outstanding accounted for 95.5% of total balances outstanding in 2018, followed by personal loans (4.3%) and credit card loans (0.2%). However, a continuous rise in income and employment levels in the economy, along with periodic regulatory monitoring, has resulted in the low growth of the country’s household debt.

Furthermore, the highly debt-averse nature of Dutch consumers ensures low balances outstanding, as they tend to finance most of their purchases using their income and savings, while benefitting from the low lending interest rates in the country. However, a fall in the performance of the country’s exports, coupled with geo-political tensions such as Brexit and the trade war between US & China, are leading to an increase in economic uncertainties and affecting overall economic growth. In addition, with the UK being the most important export destination of the Netherlands, the country might witness a deterioration of their terms of trade with the UK. As a result, we estimate the total of outstanding loan balances to grow at a CAGR of 0.8% over 2019-23.

The country’s deposits market was characterized by record-low interest rates, compelling Dutch consumers to turn to alternatives such as equities and fund shares. The Netherlands’ household savings rate as a percentage of GDP was substantially low, at 7.87% in 2018, reflecting consumers’ preference to spend rather than save. As a result, the Dutch retail deposit balances grew at a CAGR of 2.3% during the review period.

Based on our proprietary datasets, this report analyzes the Netherlandslending market, with a focus on the consumer lending segment. The report discusses in detail the credit card, personal, and mortgage loan markets, covering market size, competitors’ market shares, and survey insights. The report also provides a market overview and insights on the retail deposit segment. In addition, it covers the key digital disruptors in Netherlandretail lending segment.

Scope

• The Dutch mortgage loans registered a review period CAGR of 1.1%, the lowest in comparison to other European countries despite the market witnessing high housing prices. The slow growth can be attributed to the buyers using more of their deposits for house purchases, thereby, lowering the need to borrow more.
• The personal loans market recorded a review period CAGR of -2.2%. Despite consistently falling lending interest rates, the overall growth in personal loans was restrained by the debt-averse nature of the Dutch consumers.
• Credit card balances outstanding recorded a CAGR of -5.8% during 2014-18. This can be attributed to consumers’ preference for making immediate payments.

• Make strategic decisions using top-level historic and forecast data onthe Netherlandsretail lending industry.
• Identify the most promising lending segment.
• Receive detailed insights into lending in Netherlands, including consumerlending.
• Understand the changing market and competitive dynamics by learning about new competitors and recent deals in the retail lending space.
• Receive comprehensive coverage of the retail deposit market in Netherlands.