Borrowing by households is growing at a slightly slower rate
Growth in housing loans continued at its earlier rate in February, but there was slightly reduced take-up of consumption loans and car leases. Deposits continue to grow fast though. Businesses have borrowed less in recent months than earlier.
Borrowing activity among households in February was a little less than in February 2018. Less was taken in new consumer loans and car leases than last year, and so the growth in the loan stock slowed. As households took a little more in housing loans than they did in January, the yearly growth in the housing loan portfolio remained at 7%. It is probable that the strong labour market, rapid wage growth and low interest rates will keep demand from households for loans up in future.
Companies were quite modest in their borrowing in February. The yearly growth of 5.2% in the loan portfolio came from large transactions signed by the energy sector in recent months. Without the contribution from energy, the yearly growth in the corporate loan portfolio would have been below 2% in February. Loan volumes to most other sectors of the economy have remained around the same or have decreased slightly, with lending only increasing to companies in real estate, and that only moderately.
The average interest rate on housing loans did not change in February and remained at 2.5%, while that on long-term corporate loans rose to 3.4%. The interest rate on corporate loans varies quite a lot from month to month and depends on the projects being financed and the amounts involved each month. The general trend for interest margins since the middle of last year has been slightly upwards though.
Deposits continue to grow fast. The deposits of both companies and households in Estonia were 9% larger in February than a year before. The share of deposits in the non-financial sector that are held by non-residents declined substantially from 2015 to 2018, and in February it was 7%.