OREANDA-NEWS. February 28, 2012. Corporate lending amounted to 577 million euros in the first month of the year. This is 19% more than at the same time a year ago. The notable growth in new loans has been increasingly affected by the borrowing behaviour of the trade sector - in January, the trade sector's loans accounted for almost half of new corporate loans, with this sector's enterprises borrowing 39% more than in January 2011. The borrowing of industry and the logistics sector was, on the other hand, lower than a year ago, referring to smaller external demand, reported the press-centre of Bank of Estonia.

Households, too, took out less loans than in January 2011. Borrowing was mostly reduced on account of consumption, with consumer credit turnover a fifth smaller than a year ago. New housing loans grew 19% in January, year-on-year. This was partly due to the low reference base at the start of 2011, since the adoption of the euro triggered people to buy more real estate at end-2010.

Loan repayments continued to exceed the volume of new loans and the real sector's loan and leasing portfolio contracted by 40 million euros (0.3%) in January. The corporate loan and leasing stock even increased as a result of more active borrowing, but households' loan portfolio shrinkage was nevertheless larger. The real sector's loan and leasing stock has declined by 3.9%, year-on-year, accounting for 14.4 billion euros by the end of January.

The interest rate margins on housing loans increased for the third consecutive month, to 1.9% by the end of January. However, since tensions in money markets eased somewhat, the 6-month EURIBOR decreased by a total of 0.2 pp in January. As a result, the average interest rate on housing loans remained unchanged at 3.4%. The more volatile interest margin on long-term corporate loans declined slightly, to 4.0%.

After notable improvements in the loan portfolio quality in December 2011, there occurred no major changes in January. The share of loans overdue by more than 60 days in real-sector loans remained at 4.8%.

Household deposits increased by 22 million euros in January. Compared to the same time a year ago, households' deposits have increased 10%, to 4.3 billion euros. Corporate deposits decreased, due to seasonal factors, by 49 million euros, but were nevertheless 2.8% larger than in January 2011. By the end of January, households and companies had a total of 7.9 billion euros in their bank accounts.