Banks, Estonia, Financial Services, Loan, Real Estate

The activity of lending has not increased notably in May, the article writes.

The quality of the loan portfolio worsened again in May over several months, as the stock of loans overdue for more than 60 days increased by 821 million kroons and constituted seven% of the loan portfolio. The quality suffered primarily from loans, issued to companies, in particular to the commercial real estate sector. Meanwhile, the stock of housing loans overdue for more than 60 days declined by 77 million kroons and accounted for 4.5% of total housing loans.

The interest rates on long-term loans remained unchanged regardless of slight growth in the loan stock. The interest rates on new loans stood at the average level of the past twelve months: the average rates on long-term corporate loans and housing loans were 4.3 and 3.4%, respectively.

The stock of non-financial sector deposits grew further in May, which reflects prudent financial behaviour of companies and households. In May, corporate deposits increased by a total of 1.3 billion kroons to 57.7 billion kroons, over ten% more than a year ago.

The stock of household deposits remained virtually unchanged at 55.9 billion kroons. Considering the low deposit interest rates, households tend to invest increasingly less in time deposits. By the end of May, the share of time deposits had dropped to 56% of total household deposits.