BANK OF ISRAEL
Office of the Spokesperson and
Economic Information
January 26, 2016
Press Release
Debt Developments in the Economy, November–December 2015
The following are a number of changes made to the debt and credit aggregates, which are
reflected in this and future notices:
1. As part of the continuing expansion and improvement of data in the Bank of
Israel’s databases, the Information and Statistics Department has compiled
historical data on the debt and credit system in the economy. As a result, the
historical availability of data has been extended by more than 7 years, and data are
now available as far back as September 1992, rather than December 1999. The
data will be available on the Bank of Israel’s website as of the publication of this
notice.1
2. As part of this work, there were also methodological improvements made to the
current and historical data. In addition, information added to the banks’ monthly
balance sheets has helped in improving data on debt. The following is a table
presenting the main changes in the September 2015 data on the business sector
and households2:
Business sector
Total debt
Debt to banks
Old
820
395
30/09/2015
New Difference
807
-13.8
386
-9.1
Households
Total debt
Debt to banks
Derived from a more correct breakdown of
balance-sheet housing and nonhousing credit:
Credit classified by the banks as business credit
has been reclassified as credit to households.
Tradable bonds in Israel
154
154
0.0
Earmarked credit
5.1
0
-4.8
0.0
-2
-1.5
Loans from institutional investors
0.0
-3
-3.2
55.6
25.8
1.5
184
56
26
2
184
0.0
0.0
0.0
0.0
Earmarked credit deduction to local authorities
from the business sector
Correction of the classification of earmarked
credit that is not for housing or to the authorities
Loans from institutional investors
Nontradable bonds
Loans from credit card companies
Credit from abroad
Derived from a more correct breakdown of balancesheet housing and nonhousing credit: Credit
classified by the banks as business credit has been
reclassified as credit to households.
Earmarked credit
Correction of the classification of earmarked credit
that is not for housing or to the authorities
Old
455
417
14
30/09/2015
New
Difference
468
12.4
427
9.1
17.6
3.2
3.2
3.2
10
10
0.0
Loans from credit card companies
14
14
0.0
Housing debt
Nonhousing debt
318
137
318
149
0.5
11.9
3. As of the next press release on the debt, the Information and Statistics Department
will analyze the data on a quarterly frequency, and will therefore public a
quarterly press release on debt developments in the economy. In parallel, monthly
balance data will continue to be published on the Bank’s website on monthly
frequency, but the limitations of the monthly data, as detailed below, due to which
1
2
http://www.boi.org.il/he/DataAndStatistics/Pages/MainPage.aspx?Level=4&Sid=53&SubjectType=2
For more details see Tables Debt on the Bank of Israel’s website.
Debt Developments in the Economy, November–December 2015
Page 1 of7
the decision was made to move to a quarterly analysis, must be taken into
account:
a. The quarterly data reported by the banks are based on their balance sheets,
which undergo a high level of control, and when amendments and improvements
are made to the quarterly data, they are not necessarily reflected in the monthly
data. Therefore, in some of the debt aggregates, the balance data during the
quarter are not consistent with the balance data to the end of the quarter.
b. The monthly data are more volatile than the quarterly data, and make it difficult
to compile an analysis that will properly reflect the trends in the credit market.
Business sector debt increased in November by about NIS 1 billion (0.1 percent), to
about NIS 810 billion. Household debt increased in October by about NIS 3.1 billion
(0.7 percent), to around NIS 472 billion at the end of the month.
The business sector’s outstanding debt
 In November, business sector debt increased by about NIS 1 billion to around NIS
810 billion. The increase derived mainly from the depreciation of the shekel against
the dollar by about 0.3 percent, which increased the shekel value of debt denominated
in and indexed to foreign exchange. In addition, there was net raising of debt through
bank loans and nonbank loans, which were mostly offset as a result of the net
repayment of tradable and non-tradable bonds in Israel and credit from abroad.
 In December, the business sector (excluding banks and insurance companies) issued
about NIS 1.8 billion in bonds, all in tradable bonds. This is significantly lower than
the average issuance of the first eleven months of the year (about NIS 2.5 billion).
Table 1: The Composition of Business Sector Debt
Balance (NIS billion)
12-2013 12-2014 11-2015 9-2015 10-2015
1. Debt to banks 1
2. negotiable bonds in Israel
3. Non-negotiable bonds and nonbank
loans
4. Debt abroad 2
Total business sector debt
1. Debt to banks 1
2. negotiable bonds in Israel
3. Non-negotiable bonds and nonbank
loans
4. Debt issued abroad
Total business sector debt
378
163
376
153
391
155
386
154
389
156
11-2015
2013
2014
391
155
-2.2
2.8
-0.5
-6.2
Change (percent)
* 2015 9-2015 10-2015
4.2
1.2
0.0
1.4
11-2015
0.8
1.2
0.7
-0.6
77
81
83
83
83
83
21.9
4.6
2.8
-0.2
0.2
-0.4
169
787
189
798
181
810
184
807
181
809
181
810
7.6
2.8
12.1
1.5
-4.4
1.4
0.3
0.3
-1.5
0.3
-0.1
0.1
2013
Estimated Flow(NIS billion(
2014
* 2015 9-2015 10-2015
11-2015
2013
2014
-11.5
0.0
-6.3
-5.7
3.6
2.3
2.3
-1.1
-3.0
0.0
-1.7
-3.5
14.7
2.4
0.6
2.3
Change (percent)
* 2015 9-2015 10-2015
3.9
1.6
0.1
1.5
11-2015
0.9
1.5
0.6
-0.7
1.1
3.2
1.8
-0.1
0.2
-0.4
1.7
4.1
2.3
-0.1
0.2
-0.5
15.4
5.0
-3.7
-12.4
-5.8
13.1
0.8
3.6
-0.1
6.0
-0.7
0.1
9.8
0.7
-2.2
-1.6
-3.1
1.6
0.4
0.4
-0.1
0.7
-0.4
0.0
1
When comparing balances of debt to banks, it should be taken into account that beginning in January 2011 new Bank Supervision directives referring to provisions
for impaired debts came into effect.
2
The reported balance of credit from nonresidents to the business sector is based on reports by Israeli companies.
Debt Developments in the Economy, November–December 2015
Page 2 of7
Figure 1: Rate of Change (Year on Year) in the Business Sector's Bank and
Nonbank Debt
Borrowers
Table 2: Debt by Indexation
Debt by Indexation (NIS billion)
11/2015
CPI indexed Foreign Currency Unindexed
Business sector
231
223
356
Of which: to banks
44
40
307
Of which: to non-banks
187
183
49
Households' debt
172
6
294
Of which: to banks
145
6
281
Of which: to non-banks
28
0
13
Of which: Loans for Housing
157
5
159
Total
810
391
419
472
431
41
321
%
CPI indexedForeign CurrencyUnindexed
29%
28%
44%
11%
10%
79%
45%
44%
12%
36%
1%
62%
34%
1%
65%
67%
0%
33%
49%
2%
50%
Figure 2: Business Sector Bond Issuance
Debt Developments in the Economy, November–December 2015
Page 3 of7
Household debt
 Households’ outstanding debt increased by about NIS 3.1 billion (0.7 percent) in
November, to about NIS 472 billion. Of that, the balance of outstanding housing debt
increased by about NIS 2 billion, to about NIS 321 billion.
 In December, there was a seasonal increase in new mortgages taken out, with new
mortgages totaling about NIS 5.6 billion, slightly higher than the average in the first
eleven months of the year, which is about NIS 5.4 billion (see Figure 3).
Table 3: Outstanding Debt Balances of Households1
Bilion shekels, current prices, month-ends
Balance
Rate of change
From beginning of
5
year
Last quarter
Month ov er
month
2011
2012
2013
2014
9-15
10-15
11-15
371
393
420
445
468
469
472
6.0%
0.8%
0.7%
325
349
378
403
427
428
431
7.1%
1.0%
0.7%
222
243
265
284
303
304
306
8.0%
1.5%
0.8%
104
106
113
119
124
124
125
5.2%
-0.4%
0.7%
5.9
6.5
7.3
8.6
9.9
10.1
10.2
19.1%
3.6%
1.2%
Of
‫לדיור‬
which:
:‫ מזה‬For housing 7
2.1
2.5
2.8
2.7
2.6
2.6
2.5
-4.9%
0.0%
-0.5%
Of
‫לדיור‬
which:
‫ לא‬:‫מזה‬
Not for housing
1.7%
2
Total household debt
According to sources:
‫מבנקים‬
From banks:
6
Of
‫לדיור‬
which:
:‫ מזה‬For housing
6
Of
‫לדיור‬
which:
‫ לא‬:‫מזה‬
Not for housing
‫מוסדיים‬
From‫מגופים‬
instituional inv estors:
3.8
4.1
4.5
5.9
7.4
7.5
7.7
30.0%
4.9%
3
‫אשראי‬
From‫כרטיסי‬
credit‫מחברות‬
cards 3
9.0
9.6
10.2
12.0
13.6
13.6
13.6
13.6%
1.8%
0.0%
4
)‫מכוון‬
‫ממשלה (אשראי‬
Government
(directed credit)4
30.8
27.9
25.1
22.3
17.6
17.3
17.2
-22.90%
-4.53%
-0.82%
27.6
23.4
20.6
17.2
12.9
12.6
12.3
-28.53%
-7.11%
-2.64%
‫לדיור‬
Total
‫ חוב‬for
‫ סך‬housing
251
269
288
303
318
319
321
5.8%
1.1%
0.6%
‫לדיור‬
Total
‫שלא‬not
‫חוב‬for
‫סך‬housing
119
124
132
142
149
150
151
6.6%
0.2%
0.8%
Of
‫לדיור‬
which:
:‫ מזה‬For housing
According to uses:
Notes:
1
Individuals, not businesses.
2
Excluding credit from foreigners, due to lack of data
3
Credit under the responsibility of credit card companies; Credit under the responsibility or guarantee of banks is included in bank data
4
Credit directed to those eligible for mortgage assistance is the majority of this figure, the remainder is credit to students
5
Last three months
6
Includes loans given with house as collateral. As of December 2012 - about NIS 20 billion.
7
Until August 2013, the data did not differentiate between mortgage-backed loans to households and mortgage-backed loans to the business sector.
Such segmentation began in August 2013, and the data were revised retroactively, so that part of the balance was reallocated to business sector debt.
Debt Developments in the Economy, November–December 2015
Page 4 of7
Figure 3 :Total Housing Credit from Banks, According to Indexation: New
Mortgage Volume
The cost of the debt
 In November, the interest rate spread in the unindexed track narrowed by about 0.04
percentage points, mainly as a result of the decline in interest on outstanding credit.
 In the CPI-indexed track, the spread between the interest rate on new bank credit
granted and the interest rate on deposits widened by about 0.05 percentage points in
November, due to a higher increase in the interest on marginal indexed credit than the
increase in interest on marginal indexed deposits.
 In December, the average spread between the yield on CPI-indexed corporate
bonds—measured by the Tel Bond 60—and the yields on CPI-indexed government
bonds widened to about 1.6 percentage points.
 In December, the average interest rate on new unindexed mortgages (variable-rate
interest) increased by about 0.08 percentage points. The average interest rate on new
CPI-indexed mortgages (fixed interest) also increase, by about 0.07 percentage points.
Debt Developments in the Economy, November–December 2015
Page 5 of7
Table 4: The Cost of the Debt
Cost of debt spreads
Interest rate (percent)
08/15
09/15
10/15
11/15
Average interest on unindexed bank credit
3.39
3.41
3.44
3.40
Interest on CPI-indexed bank credit granted during the month
2.49
2.33
2.38
2.50
Spread between interest on credit and interest on unindexed deposits
Spread between interest received on credit and interest paid on indexed deposits during
the month
3.15
3.17
3.21
3.17
1.66
1.30
1.41
1.46
Spread between indexed corporate bonds (Tel-Bond 60) and indexed government bonds
1.50
1.64
1.59
1.55
Cost of bank debt
Spreads (percentage points)
Housing loans granted during the month by banks – Average Interest rates
09/15
10/15
11/15
12/15
Variable rate, unindexed sector
1.42
1.42
1.45
1.53
Fixed rate, CPI-indexed sector
2.45
2.58
2.56
2.63
Figure 4 : Spread between Indexed Corporate Bonds (Tel-Bond 60) and Indexed
Government Bonds (monthly average)
Debt Developments in the Economy, November–December 2015
Page 6 of7
Figure 5 : New Housing Loans from Banks – Interest Rates
in the Unindexed Sector
Figure 6 : New Housing Loans from Banks – Interest Rates
in the CPI-indexed Sector
For links to Data and Statistics on the Bank of Israel website:
http://www.boi.org.il/en/dataandstatistics/pages/default.aspx
http://www.boi.org.il/en/bankingsupervision/data/pages/tables.aspx?chapterid=13
Debt Developments in the Economy, November–December 2015
Page 7 of7