The volume of housing loans continues to grow steadily
The total volume of loans and leases to Estonian companies and households was 3% larger in March than a year earlier. The loan and lease portfolio increased by 43 million euros during the month to 15.3 billion euros.
Annual growth in loans to companies was 3.3% in March as it had been in the previous month. Annual growth in new loans slowed in the first quarter to 5%, but new long-term borrowing increased as fast as before. Companies took out 12% more in long-term loans during the quarter than they did a year earlier and almost half of those went for financing real estate projects.
The volume of housing loans continues to grow steadily. Annual growth in the housing loan portfolio accelerated slightly to 3.2% in March and around 13% more was taken out in new loans in the first quarter than a year earlier. The amount taken out in housing loans in March was the same as in autumn last year. The volume of new car leases taken by households climbed to its highest level in six years in March. The car lease portfolio grew by more than 10% over the year, a little more than its average for the past two years.
Loan interest rates remained low. The average interest rate for housing loans granted in March was 2.2%, and that for long-term corporate loans was 2.5%. Loan interest rates have not changed in the past six months and remain favourable for borrowers as EURIBOR remains low.
The share of overdue loans in the loan portfolio shrank to 1.5% in March. The value of loans overdue for more than 60 days fell by 25 million euros during the first quarter and there was around 200 million euros in long-term overdue loans outstanding at the end of March. The last time that the volume of overdue loans was so low was in the middle of 2008.
Deposits continue to grow rapidly. The annual growth in household deposits has remained relatively fast at around 8% for a year already. The annual growth in corporate deposits also picked up in March and reached 8%. The total deposits of Estonian companies and households at the end of March stood at 9.9 billion euros.
Banks earned 191 million euros in net profit in the first quarter. Around 60% of this came from dividends paid out by subsidiaries. Without these dividends the net profit for the quarter would have been 3% smaller than a year earlier. The decline in net profit was partly due to the increased operating costs of the banks. The fall in EURIBOR reduced the interest income of the banks, which was down for the third consecutive quarter. As interest expenses also fell at the same time, net interest income barely changed from a year earlier.
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