Mari Tamm, Financial Sector Policy Division of Eesti Pank, Specialist

In May, the corporate and household loan and leasing stock in Estonia increased 2.9 billion kroons, i.e., 1.1%. The annual growth of loan and leasing portfolio declined to 21% in May, compared with 23% in April.

Corporate and household deposits increased in May 1.1 billion kroons, i.e., 1%. The annual growth of deposits remained at 10%, the level observed in March and April. The annual growth of household deposits remained stable at 12% for the third consecutive month. In the first five months of 2008, the household deposits have increased 4.2 billion kroons of which time deposits make up 3.9 billion kroons. This reflects the continued readiness of households to save.

In line with the changes in economic environment the volume of loans overdue has increased. In May, the volume of loans overdue for more than 60 days was 1.6%, up from 1.3% in April. As in earlier months, the volume of loans overdue increased the most for the real estate enterprises. The share of housing loans overdue for more than 60 days increased to 0.9% of the loan portfolio.

The average interest rates on housing loans and long-term corporate loans have followed the developments of the EURIBOR and have increased to 5.6% and 6.2%, respectively. In June, due to the impact of the EURIBOR, the average interest rates on household and corporate loans will probably continue to increase.

Figure 1. The annual growth of household and corporate loans and leases in Estonia

Figure 2. The volume of corporate and household deposits (EEK million) in Estonia and the annual deposit growth rate (right scale)

Figure 3. The weighted average interest rate on housing loans and long-term corporate loans issued within a month and the 6-month EURIBOR

Eesti Pank publishes a monthly statement on the most relevant financial sector indicators. The respective statistics and publication schedule are available on the web site of Eesti Pank at www.bankofestonia.info/pub/en/dokumendid/statistika/pangandusstatistika/tabelid/.