Steady growth in the loan and lease portfolio continued in April

Mari Tamm
Economist at Eesti Pank

The total volume of loans and leases issued to Estonian companies and households by banks operating in Estonia was 3% larger in April than a year earlier. The financing portfolio increased by 71 million euros during the month to 15.4 billion euros, with around half of the monthly growth in the stock of loans and leases coming from corporate debt liabilities.

Companies took out about the same amount in loans and leases during the month as they did in the previous year. Some 769 million euros in new loans and leases were given to companies in April. The amount issued in long-term loans was smaller in April than it had been in the preceding months. As in earlier months, the majority of long-term loans issued in April went to real estate companies. Agriculture companies have also taken somewhat more  in long-term loans in the past two months.

Annual growth in the volume of housing loans increased in April to 3.4%. Around 82 million euros of new housing loans were issued, which is about the same amount as in autumn last year. The volume of other household loans and leases has also been growing faster in recent months. New sales of car leases to households have been around 40% higher in the last two months than the average for last year, which has partly been because of changes that were introduced last year to the taxation of company cars. Fewer car leases have been issued to companies this year than last year.

The interest rates on loans issued by banks have remained the same for several months. The average interest rate for long-term loans taken by companies was 2.6% in April, and the average rate for housing loans was 2.2%.

The share of loans overdue by more than 60 days in the loan portfolio stood at 1.5% in April, the same level as in the previous month. There was no change in the coverage of loans overdue by more than 60 days  by provisions, and coverage was 80% at the end of April.

The deposits of Estonian companies and households grew by 7.8% over the year to April. Total deposits increased by 51 million euros during the month to 10 billion euros. The growth came mainly from household deposits, which were up 8.1% over the year in April, while corporate deposits grew only a little during the month, adding 3 million euros.


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