Banks, Estonia, Financial Services, Loan
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Thursday, 25.04.2024, 20:08
Eesti Pank: savings still growing faster than loans
"The
other financial assets of households, like cash, securities, investment fund
units and loans granted, have increased a little faster. Despite the rapid
growth, the financial savings of Estonian households in relation to incomes are
still below the European Union average," Raudsaar said in the bank's press
release.
The loan liabilities of households continued to
increase at about the same rate as their incomes. Household loan liabilities
were up 6% over the year in the second quarter. Growth in borrowing by
households has been supported by rising wages, confidence and favorable
interest rates on loans. The growth in the stock of bank loans and leases has
accelerated in recent months, but the growth in loans from other creditors,
which was previously very fast, has slowed down. In consequence, the growth in
total debt has remained the same.
"In the first half of the year there was strong
growth in investment by companies in fixed assets, which the companies mainly
financed using their own funds. More has been taken out than before in
long-term loans, and the annual growth in such loans reached 7%. Borrowing
continues to be primarily from banks operating in Estonia, but long-term loans
have been taken from abroad more than previously," the economist said.
"At the same time, the stock of short-term loans
has shrunk considerably, largely as a consequence of cash flow management in
some foreign-owned companies. The total debt liabilities of companies were 2.7%
larger by the end of the second quarter of 2017 than a year earlier,"
Raudsaar added.
The Estonian economy was again a net lender in the
second quarter, as Estonian residents invested more resources abroad than they
received from there. This indicates that the trend of the last few years for
Estonian residents to save continues, and the level of investment in fixed
assets remains relatively low despite the growth in the past two quarters.