The volume of banks' loan and leasing portfolio declined 0.4%, i.e.,
1.1 billion kroons in February. The decrease was relatively moderate
considering the current economic situation.The total portfolio volume in February was 266 billion kroons. The
contraction in the volume of the loan and leasing portfolio was rather
uniform across both enterprises and households. The current corporate
credit need is mostly affected by more modest economic activity.
Households' loan behaviour is influenced by future uncertainties, which
means people prefer saving to consumption. This is well reflected in
the February change in consumer credit volume, which dropped by 443
million kroons (including the 103-million-kroon decrease in car lease),
i.e., 1.5%.
The volume of household deposits increased in February, whereas the volume of corporate deposits decreased.
The annual growth of household and corporate deposits was 0.5% in
February with the total volume of deposits amounting to 104.8 billion
kroons. The volume of household deposits grew by 942 million kroons,
i.e., 1.7%. The volume of corporate deposits fell by 497 million
kroons, i.e., 1%.The share of loans overdue by more than 60 days in the loan
portfolio increased by 0.5 pp in February, amounting to 4.1% of the
banks' loan portfolio at the end of the month. The share of household
overdue loans did not expand in February, but the existing overdue
loans remained in default. As regards enterprises, the volume and share
of loans overdue by more than 60 days increased the most in the
construction and real estate sector. All in all, loans overdue by more
than 60 days accounted for 4.7% of the corporate loan portfolio. Since the loan portfolio shrank, the average capital adequacy ratio of banks went from 19.5% in January to 19.8% in February. Banks
have accumulated sufficient capital buffers in recent years to cope at a time when loan losses may considerably expand. The decrease in international money market interest rates keeps easing the debt burden of earlier borrowers.
Since key interest rates fell, the average interest rate on new
mortgage loans and long-term corporate credit issued in February sank
to 4.6% and 4.8%, respectively. The risk margins of banks are higher
than a year ago, but stabilised in February. This shows the credit
market situation has become slightly clearer.
Figure 1. The annual growth of household and corporate loans and leases in Estonia
Figure 2. The volume of corporate and household deposits in Estonia and the annual deposit growth rate
Figure 3. The weighted average interest rate on housing loans and
long-term corporate loans issued within a month and the 6-month EURIBOR
Figure 1. The annual growth of household and corporate loans and leases in Estonia
Figure 2. The volume of corporate and household deposits in Estonia and the annual deposit growth rate
Figure 3. The weighted average interest rate on housing loans and
long-term corporate loans issued within a month and the 6-month EURIBOR