The rapid growth in loans and leases to companies and households continued in August

Mari Tamm
Economist at Eesti Pank
  • The loan and lease portfolio of companies and households was 6% larger in August than a year earlier
  • More was granted in housing loans than previously
  • The quality of the loan portfolio remained good in August

The loan and lease portfolio of Estonian companies and households continued its rapid growth in August. The portfolio expanded by 110 million euros during the month to 16.7 billion euros, making it 6% bigger than at the same time last year.

The total volume of loans and leases to companies grew by 6.8% over the year. The corporate loan and lease portfolio has mainly increased in recent months through long-term loans, which is a reflection of increased investment activity by companies. Faster growth than the average has been seen in the volume of loans and leases to companies in manufacturing and real estate.

More was granted in housing loans than previously. New housing loans of 100 million euros were issued in August, which is the largest amount seen in recent years. The housing loan portfolio was 4.6% larger in August than it was a year ago. There was a similarly rapid increase in other loans to households to that seen in the preceding months, mostly because of car leases, where there was growth of 16% over the year.

The average interest margin on new housing loans has risen this year. The average interest margin on new housing loans was at the same level in August as it was in July, but over the whole year it has increased. The average interest rate on new housing loans in August was 2.4%. The average interest rate on new long-term corporate loans has been quite variable, which is partly because the risk level of loan projects changes more from month to month for companies than it does for households. The average interest rate for long-term loans issued to companies in August was 2.2%.

The quality of the loan portfolio remained good in August. The share of loans overdue by more than 60 days in the loan portfolio was 1.3% at the end of the month and the total volume was 194 million euros.

The total deposits of companies and households continued to grow strongly in August. Deposits increased by 73 million euros during the month to 11.1 billion euros, which is 7.6% more than at the same time last year. Corporate and household deposits grew from a year earlier at quite a similar rate.

For further information:
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