WFY’25: ‘Czech factoring market continued its path of growth’

Karel Nováček, Chairman of the Board of Directors and Chief Executive Officer, Factoring České spořitelny, a.s., share insights on the Czech Republic factoring market in the regional article featured in the most recent edition (2025) of the World Factoring Yearbook (WFY’25). Below is an excerpt from its outstanding article.

Introduction

In 2024, the Czech economy saw a steady recovery which began at the close of 2023. The GDP rose by 1.0 per cent compared to the decline of 0.3 per cent in 2023, with growth largely fuelled by household consumption, bolstered by easing inflation, rising real wages, and enhanced consumer confidence. Government spending and foreign trade also supported growth. However, the positive impact of foreign trade diminished over the year due to tepid demand from Germany and a rebound in import consumption. Conversely, investments negatively affected growth, primarily due to the substantial influence of inventories, which had been overstocked in prior years, with their gradual reduction persisting in 2024. Fixed investments further hindered GDP growth, impacted by weak external demand and elevated Czech National Bank (CNB) interest rates.

It is still the case that most factoring companies in the Czech Republic are members of banking groups. The Czech banking sector remains robust and has gained a relatively strong position over the past couple of years. The asset-quality remains very good, Tier 1 capital ratio is high and has practically remained unchanged since the beginning of 2024, staying at 22.6 per cent (the same level as in 2023). In 2022 the ratio was at 21.5 per cent.

The share of non-performing loans (NPLs) in the total volume of loans to non-financial corporations reached 2.5 per cent by mid-2024 and remained below the three-year average of 3.2 per cent. The level is still very low. Factoring companies can continue to rely on the support of their stable parent banks. Nothing negative occurred in the banking sector in 2024.

The Czech factoring market continued its path of growth. Factoring volumes again reached record levels in 2024, growing by 2.9 per cent, which is higher than in 2023, when it was only 0.9 per cent. At the same time, it is quite far behind the record years of 2022 (+22 per cent) and 2021 (+27.8 per cent). Despite some hurdles, the factoring industry growth in 2024, was supported by lower interest rates and more investment. In terms of products, traditional factoring still predominates. Companies have become even more aware that factoring and confirming help their supply chains in difficult times, and these products are not only a payment vehicle but also gives them the ability to anticipate risk.

…

To read the whole article and 42 other specialist articles and country market reviews, order World Factoring Yearbook 2025 here.