Households were active in borrowing in April



Borrowing by households slowed at the start of the year, but it bounced back in April as households were active in taking housing loans and car leases. The corporate loan portfolio has gradually increased in volume and the average interest rate on bank loans has remained at the average level of the past year.

Households were borrowing at a calmer rate at the start of the year, but borrowing activity has picked up again in the past two months. One fifth more was issued in new housing loans in April than in the same month last year. The portfolio of housing loans at the banks grew by 7.2% over the year and the volume of car leases continues to grow fast[1]. Rapid wage growth and low interest rates continue to favour demand for loans.

The stock of loans and leases to companies grew by 5.8% over the year, and this growth was encouraged by large one-off loan transactions with energy companies in previous months. The loan portfolio of other sectors grew by 3-4% in volume at the same time. The largest volume of long-term loans issued in April went to companies in real estate and construction, and in retail.

The average interest rate on housing loans has held steady in recent months at 2.5%. The interest rate on long-term corporate loans is more variable and depends on the projects being financed in each month. The average interest rate in April was 2.7%, which is around the average interest rate for loans issued in the past year.

The ability of both households and companies to repay their loans remains good. The share of loans overdue by more than 60 days in the loan portfolio is very small at 0.6%, and the banks have made provisions of almost the same amount to cover potential loan losses from problem loans.

The deposits of households and companies continue to grow very fast. Both grew by around 9% over the year to a joint total of 14.3 billion euros. The deposits at banks and their loan portfolios have increased by about the same amount over the past year.

Financial sector statistics and their publication schedule


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Hanna Jürgenson
Eesti Pank
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[1]   The portfolio of car leases and other loans to households was also increased by the addition of one bank and one leasing company to the list of those with a duty to report.