Estonia, Financial Services, Loan

The central bank stated in its new overview of the financial market that nearly half of the volume of the loans that are overdue by more than 60 days which were added in January were loans taken by enterprises operating in the real estate business.

The share of over 60 days overdue loans grew to 3.6% of the loans portfolio by end of January from 2.9% in December. The volume of housing loans that much overdue grew by 453 million kroons in January, from December's level of 1.9% to 2.3% of the portfolio in January.

The volume of savings of Estonian individuals and enterprises fell by 1.5 billion kroons or by 1.4% in January, to 104 billion kroons. While the volume of individuals' savings grew by 111 million kroons in January to 53.9 billion kroons, the volume of enterprises' savings fell by 1.6 billion kroons.

The balance of loans and leasing contracts issued to enterprises and individuals in Estonia fell by 1.1 billion kroons or by 0.4% in January. The decline in the financing portfolio was wide-based; the loans and leasing portfolio fell the most in the real estate, trade and manufacturing sectors.

According to the Bank of Estonia, the good news is that the banks do not have any capital problems. The banks' average capital adequacy grew from 18.8% in December to 19.6% in January. In the past few years, the banks have formed remarkable capital buffers with the profits earned which can be used to cover losses from loans in the current more difficult economic situation.