World Savings Day

In 1924, at the first international congress of savings banks in Milan, Italy, 354 representatives of approximately 7,000 savings banks and their branches from 27 countries selected 31 October to be the World Savings Day.

The World Savings Day is intended to promote saving across the world and to raise awareness of the public about the importance of saving for modern economies and individuals. According to the latest data, the World Savings Day is celebrated in 80 countries.

Saving has a long tradition in Slovenia (of approximately 2 centuries), since saving banks were the first form of banking activities in Slovenia. The first and oldest financial institution in Slovenia was the savings bank Ljubljanska hranilnica, established in 1820. In 1845, it was renamed to the saving bank Kranjska hranilnica. Later on, numerous city savings banks and credit cooperatives, called loan institutions, were established. The establishment of the first Slovenian joint-stock company, the Ljubljana Credit Bank, in 1900, marks also the beginning of the development of banking in Slovenia.

What is saving and what are the most important motives allegedly linked to saving?

Household saving represents that part of disposable income, which is not spent for the purchase of durable consumer goods and services, but is saved. Household savings thus equal the disposable income minus the final consumption.

The research of the European central bank Working group for savings and investments showed that according to the first wave of data of the Household Finance and Consumption Survey, the most important motives for saving of households in all euro area countries are ensuring of funds in case of unforeseen events (precautionary saving theory), ensuring an income at retirement, provision of funds for larger purchases (additional housing, furniture, vehicles) and saving for travelling (vacations), education and financial support for children and grandchildren.

The gross household saving rate in Slovenia in 2018 was again higher than the averages of EU-28 and of EA-19 Member States

In 2018, Slovenian households saved 12.6% of their disposable income, which is more than the households on average saved in EU-28 (10.0%) and in EA-19 Member States (12.4%). 

Based on the latest available data from Eurostat, in 2018 Germany had the highest gross household saving rate (18.5%), followed by Sweden (18.0%), the Netherlands (15.1%), France (13.8%) and Austria (13.1%). Slovenia and Norway each had a gross household saving rate of 12.6% and thus shared the sixth place among the selected European countries that were analysed. The lowest and simultaneously negative gross household saving rates were recorded in Greece (–5.9%) and in Romania (–2.4%), meaning that households in these two countries spent more than the amount of their disposable income (the difference is normally being financed with loans or increased borrowing or the reduction of savings).

In Portugal, Norway, the Netherlands, Ireland and Poland, the gross saving rate in the gross disposable income decreased slightly compared to 2017, while it increased slightly in the remaining selected analysed countries. This indicates that in the majority of the EU-28 Member States the consumption growth was smaller than the growth of the disposable income.

In 2018, households in Slovenia remained faithful to traditional savings

Based on the data from financial accounts of the Bank of Slovenia, we can see that the share of liabilities in household assets in Slovenia is gradually decreasing compared to the peak (31.8% in 2011). In 2018, this share was 26.6%. In 2018, the household assets increased by 7.6% compared to 2017, while the liabilities increased by 5.9%.

Although the majority of Slovenian households – despite low interest rates on deposits – still opts for classical saving in the form of bank deposits, their share in the overall structure of financial assets as well as within the cash and deposit structure decreased slightly.

In 2018, household cash and deposits in Slovenia represented 47.7%, shares and other equity 30.2%, insurances and pension schemes 13.8%, securities and other receivables 6.0% and loans 2.3% of all financial assets.

Besides deposits, the share of savings in 2018 in the form of insurances and pension schemes and securities and other receivables decreased compared to the previous year, while the share of loans and particularly shares and other equity increased in the overall structure of financial assets. In 2018, households in Slovenia remained quite risk averse.

In the last three years, households in Slovenia  frequently decide on consumer loans

In 2018, the majority of household liabilities (87.1%) represented loans. In 2018, the share of long-term loans (80.4%) in the overall structure of financial liabilities of households in Slovenia heavily exceeded the share of short-term loans (6.7%), and other claims and obligations (12.9%).

Loans have been gradually increasing since 2014, in 2018 loans increased by 6.5% compared to 2017. Especially in the last two years, the growth of consumer loans was significantly faster than the growth of housing and other loans. Favourable economic conditions, improved labour market conditions, favourable financing conditions, relatively low indebtedness and increased creditworthiness of households over the past few years coincided with fast-growing consumer loans. The growth of housing loans remained relatively stable over the past few years.

Among the different types of loans, consumer loans increased the most in 2018 compared to the previous year, as they increased by 11.3%, while housing loans increased by 4.4% and other loans by 7.3%.

Nevertheless, the share of individual types of loans in view of  the overall structure of the loans did not change significantly. In 2018, the share of housing loans decreased by 1.2% and was 60.2%, while the share of consumer loans represented 25.9% or 1.1 p.p. higher than in 2017. Other loans represented 14.0 % of all loans, their increase in 2018 was 0.1%.