The housing loans portfolio continued to grow in recent volume in April, gaining EUR 194 million, while the preparedness of companies to invest with the help of loans was dwindling, the Estonian Banking Association said.
The Estonian Banking Association said that companies’ loan portfolio fell short of EUR 300 million for the fourth consecutive month.
The private loans portfolio exceeded EUR 10.5 billion as of late March. Banks are seeing much lower-than-usual corporate loan gains this spring, while the portfolio still grew a little and is nearing EUR 8.5 billion.
The volume of loans with payments over 60 days late grew for the second month in a row to reach EUR 23.4 million. The volume of problematic private loans also started growing and now amounts to EUR 18 million. The relevant volumes were EUR 28 million and EUR 41 million a year ago.
Even though Estonian households and companies are managing and the next heating season is still some way away, rapid and broad-based price advance will soon start to affect subsistence, with preparations in order, Allan Parik, CEO of SEB bank and chairman of the board of the Estonian Banking Association, said.
“We are made cautious by companies’ lower-than-usual activity and slightly growing arrears. Unfortunately, uncertainty is still growing and we will have to buckle in – stock market fluctuations and rapid inflation are likely to continue in the coming months,” Parik suggested.
The executive said that problems were bound to pile up in some industrial sectors and construction that required production inputs that used to come from Russia or Ukraine. “Highly unstable energy prices and uncertainty heading into the new heating season are only adding to the confusion.”
The association remarked that banks were willing to deploy various solutions to help companies in cooperation with the public sector.
“The Estonian Banking Association has sent a number of proposals to the Ministry of Economic Affairs and Communications on how to support Estonian businesses that in turn helps maintain jobs,” Parik said, adding that he hoped the association and ministry could craft solutions before they were needed.
Commercial banks continue to be bothered by various phone and online fraud cases. Monthly fraud damages still stretch into hundreds of thousands of euros, with no signs of improvement on the horizon, the association said. (ERR/Business World Magazine)
