OREANDA-NEWS. November 29, 2012. After rapid growth until mid-summer, borrowing activity has somewhat stabilized. Although the annual growth rate in new corporate loans has been close to or even above 20% in recent months, borrowing volumes were relatively even across months in the second half of the year, reported the press-centre of Eesti Pank.

The October lending turnover was driven by a fast rise in short-term loans. In the latter, the heightened borrowing activity of trading companies played a significant role. At the same time, the volume of new long-term corporate loans was 1% smaller than a year ago.

Households’ credit volume was affected by a pickup in car leasing. In October, new car leasing transactions were worth a total of 15 million euros, which is the highest indicator for the past four years. As a result, the annual growth rate of new car leasing sales accelerated to 45%. The most of student loans are issued in September and October. Both the number of people applying for the student loan and the respective new loans have been decreasing with each year. A total of about 10 million euros were issued as student loans in the first two months of this academic year. This is 24% less than a year ago. New housing loans amounted to 56 million euros in October, being in the same magnitude as in September.

The annual growth in the loan and leasing portfolio remained at the previous month’s level of 0.8% in October. Irrespective of the stable credit turnover, the stock of the loan portfolio shrank by 41 million euros, amounting to 14.6 billion euros by the end of the month.

The average interest rate on new housing loans remained at the previous month’s level of 2.7%. Since the decline in 6-month EURIBOR, which is the key interest rate for the majority of loans, decelerated, the average interest margin remained at September’s 2.2% level. The average interest rate on long-term corporate loans rose to 3.2%, close to the previous three months' average.

The volume of overdue loans contracted faster than earlier in October. The share of loans overdue by more than 60 days shrank from 4.1% to 3.8% in the loan portfolio. Over the past few years, the quality of the loan portfolio has been affected by problem loans stemming from the past years’ macroeconomic contraction. In October, more uncollectible loans were written off the balance sheet than on average in recent months.

Driven by corporations, annual deposit growth remained at the level of 9%. The total corporate and household deposit stock increased by 94 million euros in October, to 8.5 billion euros at the end of the month. Deposits grew mostly owing to an increase in the funds deposited by companies. The stock of household deposits has not changed in the second half of the year, so it remained at the end-June level of 4.6 billion euros in October.