Credit crisis has limited effects in 2007

17/07/2008 15:00

According to figures on the Dutch economy in 2007 published by Statistics Netherlands today, Dutch financial institutions suffered only limited effects of the international credit crisis in 2007. The value of their financial assets diminished by only 32 billion euro as a result of lower exchange rates. Profits before tax were lower than in 2006, but still clearly higher than in 2005. 

Bank profits down 14 percent

Profits of Dutch banks were 14 percent lower in 2006. Profits from interest were substantially down, while commission revenues were slightly higher. Income from capital rose by no less than 22 percent as a result of higher interest and other rates, and higher income from dividend payments. On the other hand, they spent nearly 30 percent more on interest, and wage costs rose by more than 10 percent.  

Moderate year for insurers, good year for pension funds

Profits of insurance companies fell by 8 percent in 2007 to 5.3 billion euro. Insurers sold fewer investment and life insurance polices and were confronted by substantial claims for fire and storm damage. Pension funds, on the other hand, received considerably more income from invested capital. Income from interest and dividend payments also both rose heftily. Insurers and pension funds received a total 37 billion euro in premiums, while they paid 32 billion in pensions.

Rise in financial assets in spite of lower share prices and exchange rates

Total financial assets of Dutch banks rose by 534 billion euro to more than 3.1 trillion euro in 2007. This increase was the result of acquisitions of shares, bonds and deposits, and granted loans. The fall in the rate of the dollar, and - in the second half of 2007 - the decline on the stock exchanges, had had a negative effect of only 15 billion euro on the value of financial assets at the end of 2007.
Financial assets of insurance companies and pension funds increased by 14 billion euro to 1,066 billion, in spite of 17 billion euro in losses as a reult of lower share prices and exchange rates. The provisions of insurance companies and pension funds for payments of pensions rose by 17 billion euro in 2007, to 967 billion euro. This is a considerbaly smaller increase than in previous years. 

Household income shows highest growth for six years

Households benefited to a considerable degree from the further recovery of the economy in 2007. Real disposable household income rose by 3.7 percent in 2007. This is the largest increase since 2001. The growth was prompted mainly by the increase in jobs of more than 200 thousand, larger wage rises and good results for the self-employed. Consumption lagged somewhat behind the real increase in income, with a growth of 2.1 percent.

Households took out a net 44 billion euro more in mortgage loans in 2007. This increase is slightly smaller than in 2006. The totel outstanding mortgage debt of Dutch households amounted to 588 billion euro at the end of last year. Their total savings balance increased substantially again in 2007; the 15 billion euro growth was partly the result of sales of shares.