BANK OF ISRAEL
Office of the Spokesperson and
Economic Information
May 5, 2015
Press Release
Debt Developments in the Economy, February–March 2015
Business sector debt declined by about 0.1 percent to around NIS 826 billion in
February. Household debt increased by about NIS 1.6 billion (0.4 percent) to around
NIS 439 billion at the end of the month.
The business sector’s outstanding debt
 The total outstanding debt of the business sector declined by about NIS 1 billion (0.1
percent) to around NIS 826 billion in February. The decline derived mostly from net
repayments of bank loans totaling about NIS 5 billion, and from the effect of the
decline in the Consumer Price Index by about 0.7 percent, which lowered the value of
CPI-indexed debt. These declines were mostly offset by net new debt raised through
tradable bonds in Israel and nonbank loans, and by a depreciation of about 1.1 percent
in the value of the shekel vis-à-vis the dollar.
 In March, the business sector (excluding banks and insurance companies) issued
about NIS 2.9 billion in bonds, mostly tradable bonds, slightly higher than the
average amount of issuances over the past 12 months (NIS 2.6 billion).
Table 1: The Composition of Business Sector Debt
Balance (NIS billion)
Change (percent)
12-2013
12-2014
2-2015
12-2014
1-2015
2-2015
2013
2014
* 2015
12-2014
1-2015
2-2015
1. Debt to banks 1
2. negotiable bonds in Israel
3. Non-negotiable bonds and nonbank loans
386
385
388
385
393
388
-1.6
-0.2
0.8
-1.0
2.0
-1.2
163
153
153
153
153
153
2.8
-6.2
0.1
-2.4
-0.4
0.5
81
87
90
87
88
90
24.1
6.3
3.8
-3.0
2.1
1.7
4. Debt abroad 2
Total business sector debt
168
190
194
190
193
194
6.9
13.5
2.1
-1.1
1.3
0.8
799
815
826
815
827
826
3.2
2.1
1.3
-1.5
1.4
-0.1
2013
2014
* 2015
12-2014
1-2015
2-2015
2013
2014
* 2015
12-2014
1-2015
2-2015
-10.9
-5.2
2.7
-2.7
7.7
-5.0
-2.8
-1.3
0.7
-0.7
2.0
-1.3
0.0
-5.7
1.2
-3.6
-0.6
1.8
0.0
-3.5
0.8
-2.3
-0.4
1.2
1.8
4.8
3.3
-2.9
1.7
1.7
2.7
5.9
3.8
-3.3
1.9
1.9
14.5
-5.0
0.2
-1.9
0.6
-0.5
9.2
-3.0
0.1
-1.0
0.3
-0.2
5.3
-11.0
7.4
-11.1
9.4
-2.0
0.7
-1.4
0.9
-1.3
1.2
-0.2
Estimated Flow (NIS billion(
1
1. Debt to banks
2. negotiable bonds in Israel
3. Non-negotiable bonds and nonbank loans
4. Debt issued abroad
Total business sector debt
Change (percent(
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. Recently, companies were added to the population of
reporting companies, which impacted on the reported balance beginning from December 2006. The effect of adding the new reporting entities is reflected in an increase of
about NIS 13 billion in the balance reported for December 2006.
* From the beginning of the year.
Debt Developments in the Economy, February-March 2015
Page 1 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)
2/2015
CPI indexed Foreign Currency Unindexed
Business sector
248
241
336
Of which: to banks
49
43
296
Of which: to non-banks
200
198
40
Households' debt
171
6
262
Of which: to banks
144
6
250
Of which: to non-banks
27
0
12
Of which: Loans for Housing
165
5
134
Total
826
388
437
439
400
39
304
Debt Developments in the Economy, February-March 2015
%
CPI indexed Foreign Currency Unindexed
30%
29%
41%
12%
11%
76%
46%
45%
9%
39%
1%
60%
36%
2%
62%
70%
0%
30%
54%
2%
44%
Page 2 of7
Figure 2: Business Sector Bond Issuance
Household debt
 Households’ outstanding debt increased by about NIS 1.6 billion (0.4 percent), to
about NIS 439 billion, in February. Of that, the balance of outstanding housing debt
remained virtually unchanged, at about NIS 304 billion at the end of February.
 In March, there was an increase, partly seasonal, in new mortgages taken out, which
totaled about NIS 5.6 billion. The average since the beginning of the year is about
NIS 4.9 billion (see Figure 3).
Debt Developments in the Economy, February-March 2015
Page 3 of7
Table 3: Outstanding Debt Balances of Households
Outstanding debt balances of households1
Bilion shekels, current prices, month-ends
Balance
2011 2012 2013 2014 12-14 1-15
2
Total household debt
According to sources:
From banks:
‫מבנקים‬
6
:‫מזה‬For housing6
which:
‫לדיור‬
Of
Not for housing
which:
Of
‫ לא‬:‫מזה‬
‫לדיור‬
investors:
‫מגופים‬
From instituional
‫מוסדיים‬
7
which:
Of
:‫מזה‬For housing
‫לדיור‬
Not for housing
which:
Of
‫ לא‬:‫מזה‬
‫לדיור‬
3
3
‫מחברות‬
‫כרטיסי‬cards
‫ אשראי‬credit
From
4
Government
‫ ממשלה‬credit)
)‫( (אשראי מכוון‬directed
which:
Of
:‫מזה‬For housing
‫לדיור‬
According to uses:
housing
for‫סך‬
Total‫חוב‬
‫לדיור‬
‫סך‬
for housing
not‫חוב‬
Total‫שלא‬
‫לדיור‬
Notes:
4
1
2
3
4
5
6
7
2-15
Rate of change
Last Month
From
beginnin quarter over
5
g of year
month
363
383
410
433
433
438
439
1.5%
2.0%
0.4%
318
341
369
393
393
398
400
1.9%
2.5%
0.5%
221
96
5.9
243
98
6.5
264
105
7.3
283
110
8.6
283
110
8.6
285
113
8.7
285
115
8.9
0.7%
5.0%
4.1%
1.6%
4.8%
7.1%
0.1%
1.6%
2.0%
2.1
3.8
2.5
4.1
2.8
4.5
2.7
5.9
2.7
5.9
2.7
6.1
2.7
6.2
1.0%
5.5%
2.9%
9.0%
2.0%
2.1%
9.0
9.6
10.2
12.0
12.0
12.0
12.0
0.0%
0.5%
0.0%
30.8
27.6
26.1
23.4
23.0
20.6
19.1
17.2
19.1
17.2
18.7
16.8
18.0
16.2
-5.79%
-5.79%
-7.61%
-7.61%
-3.85%
-3.85%
251
112
269
114
288
122
303
129
303
129
304
133
304
135
0.3%
4.4%
1.0%
4.4%
-0.1%
1.4%
Individuals, not businesses
Excluding credit from foreigners, due to lack of data
Credit under the responsibility of credit card companies; Credit under the responsibility or guarantee of banks is included in bank data
Credit directed to those eligible for mortgage assistance is the majority of this figure, the remainder is credit to students
Last three months
Includes loans given with house as collateral. As of December 2012 - about NIS 20 billion.
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.
Figure 3 :Total Housing Credit from Banks, According to Indexation: New
Mortgage Volume
Debt Developments in the Economy, February-March 2015
Page 4 of7
The cost of the debt
 In February, the interest rate spread in the unindexed track narrowed by about 0.03
percentage points, mainly as a result of a decline in the 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 narrowed by about 0.18 percentage points in
February, compared with the previous month, mainly as a result of a decline in the
interest on marginal indexed credit.
 In March, 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 1.69 percentage points.
 In March, the average interest rate on new unindexed mortgages (variable-rate
interest) declined by about 0.11 percentage points. The average interest rate on new
CPI-indexed mortgages (fixed interest) also declined by about 0.11 percentage points.
Table 4: The Cost of the Debt
Cost of debt spreads
Interest rate (percent)
11/14
12/14
01/15
02/15
Average interest on unindexed bank credit
3.60
3.59
3.59
3.57
Interest on CPI-indexed bank credit granted during the month
2.30
2.33
2.47
2.34
Spread between interest on credit and interest on unindexed deposits
3.23
3.23
3.27
3.25
Spread between interest received on credit and interest paid on indexed deposits during the month
1.64
1.62
1.64
1.46
Spread between indexed corporate bonds (Tel-Bond 60) and indexed government bonds
1.46
1.84
1.83
1.77
12/14
01/15
02/15
03/15
Variable rate, unindexed sector
1.51
1.51
1.45
1.34
Fixed rate, CPI-indexed sector
2.18
2.28
2.28
2.17
Cost of bank debt
Spreads (percentage points)
Housing loans granted during the month by banks – Average Interest rates
Debt Developments in the Economy, February-March 2015
Page 5 of7
Figure 4 : Spread between Indexed Corporate Bonds (Tel-Bond 60) and Indexed
Government Bonds (monthly average)
Figure 5 : New Housing Loans from Banks – Interest Rates
in the Unindexed Sector
Debt Developments in the Economy, February-March 2015
Page 6 of7
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, February-March 2015
Page 7 of7