Finance Active 2023 observatory of healthcare institutions' debt

On the Finance Active panel, new financings decreased by 13.9% compared to the previous fiscal year, amounting to €1.575 billion within the Finance Active panel (as opposed to €1.83 billion in 2021). This reduction in mobilized volumes occurs amidst a context of rapid and sudden increase in interest rates and constrained bank offerings.

The interest rate for new financings soared to 2.12% in 2022 with a slightly reduced average duration of 19.3 years.

The average interest rate at which Public Healthcare Institutions borrowed last year surged significantly to 2.12%. This rate stood at only 0.81% the previous year, marking a rise of 131 basis points (1.31%). The duration of new financings in 2022 experienced a slight decline compared to the previous year, now at 19.3 years (versus 21.5 years in 2021).

Borrowers are renewing their preference for fixed-rate contracts, accounting for 76% of new flows, but are opting more for variable loans (23%, including Livret A, compared to less than 11.5% the previous year), mainly due to constraints related to the usury rate throughout the year.

The share of bank financing in new flows continues its progression (58.3%), with bond utilization losing momentum.

Bond financing, at 31.2%, represents a smaller share compared to the previous year (40%), in favor of bank financing, which reached 58.3% in 2022 (an increase of 2.7 points).

In the banking sphere, the La Banque Postale/SFIL group retains its position as the top bank with a 44.7% market share, followed by BPCE at 18.15% of new financings, ahead of Crédit Agricole at 16.8%.

Outstanding balance as of December 31, 2022: The end of 10 consecutive years of decrease in the average debt balance rate.

The average rate of Public Healthcare Institutions' debt sees its first increase since 2013, reaching 2.59%, compared to 2.36% the previous year, marking a 23-point increase in a year. Meanwhile, the lifespan of the Public Healthcare Institutions' debt stock continues to decrease, reaching 14.4 years by December 31, 2022 (compared to 14.8 years at the end of 2021).

"The debt of Public Healthcare Institutions is experiencing an overall increase, explained partly by the rise in the cost of its new financings and partly by the escalation of its variable interest rate debt," highlights Antoine Le Niniven, Senior Manager Consultant in the Local Public Sector.

The proportion of fixed-rate debt in the overall balance continues to rise, reaching 76.4% compared to 74.3% the previous year. This gradual increase is partly due to the very low interest rate environment experienced before 2022, strongly encouraging borrowers to secure particularly attractive fixed-rate terms.

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Finance Active designs SaaS solutions to improve performance in debt management and financial risk management: currency, investment, forecasting, and collateral. Continuously connected to financial markets, our solutions allow for the tracking and valuation of positions and simplify the management of operations deemed complex. We provide exceptional information and a high level of support to financial teams. Our ambition is to increase their operational flexibility, maximize financial performance, and streamline decision-making. Finance Active thus supports the digital transformation of financial services for businesses, local authorities, and financial institutions with over 13,000 users across 5 continents.

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