Czech building societies grant loans of Kc58.3bn in 2010

News »  Czech building societies grant loans of Kc58.3bn in 2010

Prague, Jan 20 (CTK) – Czech building societies granted loans worth Kc58.3bn last year, down by 12 percent on the year, according to results of individual building societies that have been made available to CTK. On the other hand, the interest of clients in signing contracts on home-building savings is on the increase.

For this year, the Association of Czech Building Societies expects similar results as in 2010.

Building societies last year signed over 906,000 contracts, including contracts on raising the target sum, compared with about 887,000 contracts in 2009.

„The fact shows that home-building savings still are an interesting product,“ association secretary Jiri Sedivy said.

Owing to changes in the law on home-building savings approved within a package of the governments austerity measures last year, building societies boosted sales of contracts at the end of 2010 by offering various advantages.

The target sum in new contracts fell by about Kc8bn year-on-year to over Kc263.5bn last year.

The fall in the volume of loans was registered by all building societies on the Czech market last year.

The changes in home-building savings, in effect since the beginning of this year, reckon with a 50 percent tax on the state contribution for 2010 that will be paid in 2011. This will apply to all contracts, even the old ones. In the following years, the tax will be replaced by lower state support – from Kc3,000 to Kc2,000 a year. Interest on home-building savings, including bonus interest, will not be free from tax.

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