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Friday, 19.04.2024, 18:28
Businesses remain cautious about making investment decisions
The negative impact on the labour market of the crisis, and the uncertain outlook have continued to leave clear traces in household confidence as well. Activity declined in the housing market as some 80 million euros of housing loans were issued in May, which was 30% less than before the crisis. The volume of other loans and leases issued to households was also down substantially. The first signs of a revival in economic activity were apparent in the banking statistics for May though, as demand for financing for consumption increased a little, which was to be expected given that relatively tight restrictions were in place in April because of the coronavirus, and they were then eased during May.
The average interest rates on loans issued to companies and households did not rise during the months of the crisis. The average interest rate on long-term loans issued to companies was 2.6% in May and the average rate on housing loans with collateral was 2.3%.
The share of loans in the portfolio of the banks that are overdue remains very small. Only 0.7% of the loan portfolio by volume is overdue more than 60 days. It should be noted though that the banks have been granting payment holidays, which now extend to over 11% of the portfolio. Payment holidays give borrowers facing difficulties temporary support in surviving the acute phase of the crisis. They also give the banks a picture of how many borrowers may face lasting difficulties in repaying their loans.
Despite the difficulties in the economy, the total volume of deposits of Estonian companies and households has grown very fast in recent months. Corporate and household deposits are both 400 mln euros larger than they were at the end of February, putting corporate deposits at 7.4 bn euros and household deposits at 8.7 billion. The rapid growth in deposits has been aided by companies investing less than earlier and households reducing their consumption. Equally the measures taken by the government have helped limit the fall in incomes.
https://infogram.com/banking-sector-statistics-for-may-2020-1h7z2lryzo5g2ow
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