Statistical news focuses on the latest figures and trends in Danmarks Nationalbank’s statistics. Statistical news is targeted at people who want quick insight into current financial data.
Muted growth in Danish corporations’ debt
The annual growth in banking and mortgage debt of Danish corporations was 6.5 per cent in May. With that the unusually high growth in debt we’ve seen since fall 2021, peaking in august 2022 at 14 per cent, has been muted. This slowing down follows a period with challenged supply chains, inflation, and general liquidity challenges. The total debt of Danish corporations is now at kr. 1,452 billion which is record high.
The annual growth in loans to Danish corporations has decreased
Note: Danish non-financial corporations' banking and mortgage debt in all currencies, nominal value.
From supply chain challenges to normalization
The substantial growth in loans to Danish corporations since fall 2021 has been affected by challenges with global supply chains and pressured liquidity during covid-19 and latest inflation1. For many corporations this have occasioned a higher level of financing requirements, e.g. to stock building to ensure the supply chain security for their customers. The annual growth in debt peaked in August 2022 at 14.0 per cent and has since decreased in the light of the unusual situation.
Revolving loans and overdrafts pull down growth
Danish corporations have especially utilized their overdraft facilities in 2022 to finance their activities. The normalization of the situation has contributed to a substantial decrease in the annual growth in revolving loans and overdrafts from the peak in October 2022 at 49.3 per cent to an annual growth in May 2023 at 1.8 per cent. Danish corporations had kr. 208 billion debt in revolving loans and overdrafts in May.
Danish corporations have also taken up other banking debt in the period and at the end of May this banking debt was kr. 252 billion.
Mortgage debt pulls up growth
Since May 2022 the mortgage debt of Danish corporations has increased by kr. 66 billion and the nominal value of corporations’ total mortgage debt of kr. 993 billion in May is record high. The growth in mortgage debt plays a large role in explaining the increasing debt of Danish corporations, as it accounted for 4.8 percentage points of the total growth in debt of 6.5 per cent.
The growth in mortgage debt occurs simultaneous with an increase in corporations’ average interest rate including administration fees from 1.16 per cent in May 2022 to 2.57 per cent in May 2023.