The February deposit growth exceeded the credit volume growth
Jana Kask, Eesti Pank's Financial Sector Policy Division, Chief specialist
The total volume of corporate and household deposits in Estonia increased 2.5 billion kroons in February with the slightly quickened annual growth rate reaching 14%. Since deposit interest rates picked up at the end of 2007, interest in time deposits has increased. By end-February, the share of time, saving and investment deposits accounted for nearly a half of household deposits and a third of corporate deposits.
In February, the corporate and household loan and leasing stock increased by 2.1 billion kroons, i.e., 0.8%. The annual growth rate declined to 27%. The weaker consumer confidence compared to the previous year does not favour households' credit demand. However, the monthly increase in the aggregate housing and consumer credit portfolio was above 1%. The current credit growth developments and economic growth suggest that further adjustment should also be smooth.
The increase in the corporate loan and leasing stock was modest in February compared to the previous months. Meanwhile, relatively strong credit growth continued in the manufacturing sector, where the annual growth rate sped up to 32%, reaching the highest level of the past year and a half.
In February, the quality of banks' loan portfolio continued to deteriorate somewhat, in line with the changes in the economic environment. The share of loans overdue for more than 60 days accounted for 0.9 per cent of the loan portfolio. The volume of housing loans in default increased as well (forming 0.7% of the housing loan stock), but the quality of housing loans in general is better than the average.
The interest rates on loans issued to Estonian enterprises and households followed the developments of EURIBOR. As the latter fell, the average loan interest rate decreased, too: in February, the average interest rate on housing loans and on long-term corporate loans was 5.4% and 6%, respectively.
Figure 1. The annual growth of household and corporate loans and leases in Estonia
Figure 2. The annual growth of household and corporate loans and leases in Estonia
Figure 3. The weighted average interest rate and 6 months' EURIBOR of housing loans and long-term corporate loans issued within a month.
As from January 2008, Eesti Pank publishes a monthly statement on the most relevant financial sector indicators.
The respective statistics and publication calendar are available on the web site of Eesti Pank at www.bankofestonia.info/pub/en/dokumendid/statistika/pangandusstatistika/tabelid/.
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