BANK OF ISRAEL
Office of the Spokesperson and
Economic Information
September 9, 2015
Press Release
Debt Developments in the Economy, June–July 2015
Business sector debt declined in June, by about NIS 8.1 billion (1 percent) to around
NIS 813 billion. Household debt increased by about NIS 3.7 billion (0.8 percent) to
around NIS 445 billion at the end of the month.
The business sector’s outstanding debt
 In June, business sector debt declined by about NIS 8.1 billion, to around NIS 813
billion. The decline in the debt was a result of the appreciation of the shekel against
the dollar by about 2.8 percent, which lowered the shekel value of debt indexed and
denominated in foreign currency, and was also a result of net repayment tradable and
non-tradable bonds in Israel and of nonbank loans totaling about NIS 2.1 billion.
These repayments were slightly offset as a result of net raising of debt through bank
loans and credit from abroad.
 In the first half of 2015, business sector debt remained virtually unchanged
compared to the end of 2014. Despite this, there was net raising of debt totaling
about NIS 8 billion, most of which was through loans from banks, which was mainly
offset as a result of the appreciation of the shekel by 3.1 percent against the dollar.
 In July, the business sector (excluding banks and insurance companies) issued about
NIS 1.4 billion in bonds, mostly in tradable bonds. This is lower than the average
issuance of the first six months of the year (NIS 2.5 billion).
Debt Developments in the Economy, June–July 2015
Page 1 of7
Table 1: The Composition of Business Sector Debt
Figure 1: Rate of Change (Year on Year) in the Business Sector's Bank and
Nonbank Debt
Debt Developments in the Economy, June–July 2015
Page 2 of7
Borrowers
Table 2: Debt by Indexation
Debt by Indexation (NIS billion)
6/2015
CPI indexed Foreign Currency Unindexed
Business sector
240
225
348
Of which: to banks
47
42
303
Of which: to non-banks
193
183
46
Households' debt
167
5
273
Of which: to banks
142
5
260
Of which: to non-banks
25
0
13
Of which: Loans for Housing
160
5
146
Total
813
392
422
445
407
38
311
%
CPI indexedForeign CurrencyUnindexed
30%
28%
43%
12%
11%
77%
46%
43%
11%
38%
1%
61%
35%
1%
64%
67%
0%
33%
52%
1%
47%
Figure 2: Business Sector Bond Issuance
Household debt
 Households’ outstanding debt increased by about NIS 3.7 billion (0.8 percent) in
June, to about NIS 445 billion. Of that, the balance of outstanding housing debt
increased by about NIS 2.8 billion, to about NIS 311 billion.
 Since the beginning of the year, households’ outstanding debt increased by about
NIS 13 billion (3 percent). There were higher growth rates in non-housing debt (3.6
percent) than in housing debt (2.7 percent).
 In July, there was a small decline in new mortgages taken out, but the volume
remained significant, with new mortgages totaling about NIS 6.6 billion, higher than
the average since the beginning of the year, which is about NIS 5.4 billion (see Figure
3).
Debt Developments in the Economy, June–July 2015
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Table 3: Outstanding Debt Balances of Households
Outstanding debt balances of households
1
Bilion shekels, current prices, month-ends
Balance
Rate of change
From beginning of
year
Last quarter5
Month ov er
month
2011
2012
2013
2014
4-15
5-15
6-15
363
383
410
433
436
442
445
3.0%
2.3%
0.8%
318
341
369
393
397
403
407
3.7%
2.7%
1.0%
221
243
264
283
288
291
295
4.0%
2.9%
1.1%
96
98
105
110
109
112
113
2.8%
2.2%
0.6%
5.9
6.5
7.3
8.6
9.1
9.3
9.4
10.0%
4.5%
1.8%
Of
‫לדיור‬
which:
:‫ מזה‬For housing 7
2.1
2.5
2.8
2.7
2.6
2.5
2.5
-5.9%
-2.9%
-0.6%
Of
‫לדיור‬
which:
‫ לא‬:‫מזה‬
Not for housing
2.7%
Total household debt2
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
6.6
6.7
6.9
17.2%
7.5%
3
‫אשראי‬
From‫כרטיסי‬
credit‫מחברות‬
cards 3
9.0
9.6
10.2
12.0
12.7
12.8
12.8
7.5%
1.8%
0.6%
4
)‫מכוון‬
‫ממשלה (אשראי‬
Government
(directed credit)4
30.8
26.1
23.0
19.1
16.7
16.3
15.8
-17.49%
-8.37%
-3.29%
27.6
23.4
20.6
17.2
15.0
14.6
14.2
-17.49%
-8.37%
-3.29%
‫לדיור‬
Total
‫ חוב‬for
‫ סך‬housing
251
269
288
303
306
309
311
2.7%
2.3%
0.9%
‫לדיור‬
Total
‫שלא‬not
‫חוב‬for
‫סך‬housing
112
114
122
129
130
133
134
3.6%
2.3%
0.7%
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, June–July 2015
Page 4 of7
Figure 3 :Total Housing Credit from Banks, According to Indexation: New
Mortgage Volume
The cost of the debt
 In the CPI-indexed track, the spread between the interest rate on new bank credit
granted and the interest rate on deposits expanded by about 0.09 percentage points in
June, compared with the previous month, mainly as a result of an increase in the
interest on marginal indexed credit.
 In July, 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
narrowed to about 1.55 percentage points.
 In July, the average interest rate on new unindexed mortgages (variable-rate interest)
increased by about 0.06 percentage points. The average interest rate on new CPIindexed mortgages (fixed interest) also increased, by about 0.18 percentage points.
Debt Developments in the Economy, June–July 2015
Page 5 of7
Table 4: The Cost of the Debt
Cost of debt spreads
Interest rate (percent)
03/15
04/15
05/15
06/15
Average interest on unindexed bank credit
3.47
3.45
3.44
Interest on CPI-indexed bank credit granted during the month
2.26
2.08
1.92
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
3.22
3.20
3.20
1.55
1.12
1.28
1.37
Spread between indexed corporate bonds (Tel-Bond 60) and indexed government bonds
1.69
1.63
1.51
1.64
04/15
05/15
06/15
07/15
Variable rate, unindexed sector
1.31
1.24
1.30
1.36
Fixed rate, CPI-indexed sector
2.12
2.04
2.05
2.23
Cost of bank debt
1.99
Spreads (percentage points)
Housing loans granted during the month by banks – Average Interest rates
Figure 4 : Spread between Indexed Corporate Bonds (Tel-Bond 60) and Indexed
Government Bonds (monthly average)
Debt Developments in the Economy, June–July 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, June–July 2015
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