Archive:Financial credit and leasing sector statistics - NACE Rev. 1.1
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- Data from January 2009. Most recent data: Further Eurostat information, Main tables and Database.
This article belongs to a set of statistical articles which analyse the structure, development and characteristics of the various economic activities in the European Union (EU). According to the statistical classification of economic activities in the EU (NACE Rev 1.1), the present article covers financial credit and leasing sector statistics, corresponding to NACE Division 65, which is part of the financial and insurance sector. The activities covered in this article include:
- monetary financial intermediation (NACE Group 65.1);
- non-monetary financial intermediation (NACE Group 65.2).
In particular, it includes credit institutions and financial leasing.
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Main statistical findings
Focus on Internet financial services
One particular characteristic of the development of the Internet has been the use of e-banking. Results from Eurostat's information society statistics indicate the use of the Internet for financial services, notably e-banking and share purchasing. In 2008, close to three tenths (29 %) of all persons (aged 16 to 74) in the EU-27 used the Internet for banking, a share that was close to one half (47 %) when limited to Internet users. In nearly all Member States, even those with already high Internet banking usage, the proportion of persons using the Internet for financial services grew between 2007 and 2008, the exceptions being Bulgaria, Cyprus and Romania.
Employment in financial intermediation
According to Labour force survey data, the number of persons employed in the EU-27's sector for financial intermediation excluding insurance and pension funding (NACE Division 65) was 4.1 million in 2007. This equated to 63.1 % of those employed in the financial and insurance services (NACE Section J) sector as a whole. Germany and the United Kingdom dominated this sector in employment terms, each with just under one fifth of the EU-27's workforce. In employment terms, the most specialised Member State in this sector was, by far, Luxembourg, where 13.8 % of those employed within the business economy were working in financial intermediation excluding insurance and pension funding. The next highest share was 6.0 % in Cyprus, while the lowest shares were 1.3 % in Estonia and 1.4 % in Bulgaria and Romania.
Credit institutions
Credit institutions are defined in the first indent of Article 1 of Council directive 77/780/EEC: ‘credit institution means an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account’. In terms of the NACE Rev. 1.1 classification, credit institutions mainly correspond to NACE Class 65.12 (other monetary intermediation). However, due to the different implementation of the EU directives into national law, in some Member States credit institutions might also comprise a number of enterprises whose main activity should be classified under NACE Class 65.22 (other credit granting).
An analysis of the number of credit institutions according to the size of their balance sheets in 2006 indicates that on average approximately 1 % had a balance sheet total that was EUR 100 billion or more, while around three quarters of credit institutions reported a balance sheet total of less than EUR 1 billion. An analysis of the legal status of credit institutions in 2006 shows that the most common legal form was a co-operative enterprise, followed by incorporated enterprises.
Access to the retail banking network has changed, with a move away from services provided in branches to services provided through automatic teller machines (ATMs), phone and Internet banking. There were about 294.6 thousand ATMs in the EU-27 by 2006, and that in only five of the 25 Member States with data available were there less ATMs than local units. Estonia, Bulgaria, Finland and Portugal reported the highest ratios of ATMs to local units, while the lowest ratios were in Cyprus and Austria.
Looking at the output of credit institutions, the United Kingdom and Germany recorded the highest value added in the EU-27 in 2006, with EUR 115.6 billion and EUR 86.7 billion respectively. These two same Member States also reported the largest credit institutions workforces, with the German workforce of 679.8 thousand persons employed clearly dominant.
There was a high degree of importance for the United Kingdom in the credit institutions sector: for example, capital and reserves in British credit institutions were valued at EUR 532.7 billion in 2006, whereas capital and reserves in the next largest Member States, namely Italy (2005), Germany and France ranged between EUR 259.5 billion and EUR 276.6 billion. The combined net income (income less payments) of interest and commissions was particularly low relative to equity (capital and reserves) in Sweden, the Netherlands, Finland, France and the United Kingdom (18 % or lower), whereas it was highest in Hungary, Bulgaria, Romania, Greece and the Czech Republic (45 % or more). In all Member States net income from interest (essentially income from lending) was higher than net income from commissions (fee based business) except in Luxembourg where these values were almost the same; Greece and Cyprus reported the highest ratios of net interest to net commissions. For the Member States for which data are available the total value of loans to customers was around 7.0 % higher than the value of amounts owed to customers. By far the highest ratios of loans to amounts owed were recorded in Denmark and Sweden.
Financial leasing
Financial leasing is classified under NACE Class 65.21 and covers leasing where the term of the lease approximately covers the expected life of the asset and the lessee acquires substantially all the benefits of its use and takes all the risks associated with its ownership: the asset may or may not eventually be transferred to the lessee. No structural business statistics are available for this activity, but Leaseurope provide information on the value of newly leased assets and on outstanding leases. The largest markets in 2007 in terms outstanding leases were Germany, Italy, France and the United Kingdom, while for new leasing a similar order was observed, except that the Spanish market had over taken that in the United Kingdom.
Data sources and availability
The main part of the analysis in this article is derived from structural business statistics (SBS), including core, business statistics which are disseminated regularly, as well as information compiled on a multi-yearly basis, and the latest results from development projects.
Other data sources include Eurostat information society statistics and Leaseurope.
Context
Financial and intermediation services provide instruments to businesses and households in the form of products that are essentially savings or loans, or products to transfer and pool risk. Changes in financing techniques have increased the possibilities open to business to fund investment, while consumers have a wider array of choices for credit, savings and payment methods. At the time of writing this sector is the focus of worldwide attention due to the financial crisis widely experienced across the globe and the impact that this has had on other parts of the economy. This crisis has led to national governments taking over some financial institutions, and providing massive amounts of financial support to others. The crisis has provoked widespread calls for reforms to regulatory bodies and new ways for overseeing the operations and practices of this sector.
There has been considerable EU legislative activity in the sphere of financial and insurance services centred upon the creation of an internal market for financial and insurance services. This work has been conducted through the Financial services action plan (FSAP), which was published by the European Commission in 1999 and the legislative phase completed in 2006.
The absence of cross-border consolidation within the financial and insurance services sector has drawn attention and in September 2007 a Directive of the European Parliament and of the Council was adopted (COM(2007) 44) that would tighten the procedures that Member States' supervisory authorities have to follow when assessing proposed mergers and acquisitions in banking, insurance and securities activities. The directive aims to clarify the criteria against which supervisors should assess possible mergers and acquisitions in order to improve clarity and transparency in supervisory assessment and help to ensure a consistent handling of mergers and acquisitions requests across the EU.
In response to the financial crisis that started in 2007 and intensified throughout 2008, the European Commission adopted in October 2008 a proposal (COM(2008) 602) to amend the so-called capital requirements Directive. The aims of the proposal are to reinforce stability in the financial system, reduce exposure to risk and improve supervision of banks operating across borders.
In November 2007, a Directive of the European Parliament and of the Council (COM(2007) 64) of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market was adopted to create a new legal framework for payments, with the objectives to make payments quicker and easier, to guarantee fair and open access to payments markets, and to increase and standardise consumer protection. Although wider in scope this Directive also provided the legal basis for the single euro payments area (SEPA): SEPA credit transfers were launched in January 2008, with direct debits expected by November 2009.
In April 2008, a Directive of the European Parliament and of the Council on credit agreements for consumers (COM(2008) 48) of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers was adopted. The Directive covers consumer credit (not mortgages) of up to EUR 75.0 thousand and aims to introduce a harmonised method for calculating the cost of credit and to establish a set of rights for all borrowers.
In December 2007, the European Commission published a White paper on the integration of EU mortgage credit markets (COM(2007) 807). This paper proposes to improve the competitiveness and efficiency of mortgage markets by facilitating the cross-border supply and funding of mortgage credit as well as by increasing the diversity of products available.
Further Eurostat information
Publications
- European Business: Facts and figures - 2009 edition
Main tables
Database
Dedicated section
Other information
- Directive 2007/44 of 5 September 2007 on procedural rules and evaluation criteria for the prudential assessment of acquisitions and increase of holdings in the financial sector
- COM(2008) 602 of 1 October 2008 on banks affiliated to central institutions, certain own funds items, large exposures, supervisory arrangements, and crisis management
- Directive 2007/64 of 13 November 2007 on payment services in the internal market
- Directive 2008/48 of 23 April 2008 on credit agreements for consumers
- COM(2007) 807 of 18 December 2007: White paper on the integration of EU mortgage credit markets