Consumer credit in Europe - first recovery, then euro slump

2011 was a good year for the members of the European umbrella organization of financing banks Eurofinas. They granted new consumer loans worth EUR 328.8 billion, which corresponds to growth of 3.2% compared to the previous year. The personal loan (9.1%) and vehicle financing (3.9%) segments saw particularly strong growth.

The Netherlands performed best at country level with an increase of 15%, followed by Germany (+13%) and Belgium (+12%). Finland, Norway and Romania also grew strongly at 9%, 8% and 5% respectively, while the markets in the UK and France hardly changed. As expected, new business in Southern Europe fell. Portugal recorded the largest decline at -15%. Sweden and the Czech Republic also suffered losses.

Overall, however, Chairman Pedro Guijarro speaks of a "stable recovery in the consumer credit market". However, the greatest growth was recorded in the first half of the year, with stronger declines in the second half. The slump will continue until mid-2012 due to the uncertain markets, particularly in the eurozone. "Any possibility of a noticeable recovery at the end of the year and in 2013 will depend on how governments respond to the challenges posed by the current euro crisis," Guijarro continued.

Due to the growing uncertainty, European banks are increasingly reliant on better exploring the markets beyond Europe's borders. To do this, however, they need their own local branches, as cross-border loans are still rare even in the eurozone. This is one of the reasons why banks, as well as car manufacturers, for example, have their own specialist financiers, with whom they now want to increase their presence and expand further afield.

Aligning processes and IT internationally

These specialist banks are not only able to transfer their business processes to other countries and adapt them to local conditions, they also have tried and tested IT solutions. The latter are the prerequisite for rapid expansion. "If the afb Credit Management Solution is already in use, the country-specific adaptation usually takes no longer than six months," comments afb CEO Jan Ph. Wieners: "The global economies of scale are enormous, and at the same time the group can be managed uniformly via central IT."

"Global support" is therefore becoming an important driver of internationalization, for which specialist banks often seek support from partners such as afb - who are also specialists in the business area of these institutions.