Overdue loans 4% of banks’ loan portfolio

The volume of banks’ loan and leasing portfolio declined 0.4%, i.e., 1.1 billion kroons in February. The decrease was relatively moderate considering the current economic situation. The total portfolio volume in February was 266 billion kroons. The contraction in the volume of the loan and leasing portfolio was rather uniform across both enterprises and households. The current corporate credit need is mostly affected by more modest economic activity. Households’ loan behaviour is influenced by future uncertainties, which means people prefer saving to consumption. This is well reflected in the February change in consumer credit volume, which dropped by 443 million kroons (including the 103-million-kroon decrease in car lease), i.e., 1.5%.

The volume of household deposits increased in February, whereas the volume of corporate deposits decreased. The annual growth of household and corporate deposits was 0.5% in February with the total volume of deposits amounting to 104.8 billion kroons. The volume of household deposits grew by 942 million kroons, i.e., 1.7%. The volume of corporate deposits fell by 497 million kroons, i.e., 1%.

The share of loans overdue by more than 60 days in the loan portfolio increased by 0.5 pp in February, amounting to 4.1% of the banks’ loan portfolio at the end of the month. The share of household overdue loans did not expand in February, but the existing overdue loans remained in default. As regards enterprises, the volume and share of loans overdue by more than 60 days increased the most in the construction and real estate sector. All in all, loans overdue by more than 60 days accounted for 4.7% of the corporate loan portfolio.

Since the loan portfolio shrank, the average capital adequacy ratio of banks went from 19.5% in January to 19.8% in February. Banks have accumulated sufficient capital buffers in recent years to cope at a time when loan losses may considerably expand.

The decrease in international money market interest rates keeps easing the debt burden of earlier borrowers. Since key interest rates fell, the average interest rate on new mortgage loans and long-term corporate credit issued in February sank to 4.6% and 4.8%, respectively. The risk margins of banks are higher than a year ago, but stabilised in February. This shows the credit market situation has become slightly clearer.

The financial sector statistics and publication calendar are available on the web site of Eesti Pank at www.bankofestonia.info/pub/en/dokumendid/statistika/pangandusstatistika/tabelid/.

Source: Bank of Estonia; here you can also see the graph

Estonia supports visa freedom for Macedonia

In his meeting with Macedonian Foreign Minister Antonio Milošoski in Tallinn, Foreign Minister Urmas Paet confirmed Estonia’s support for Macedonia’s accession to NATO and the beginning of its accession negotiations with the European Union. “We have always supported the open door policy for those nations that are prepared to accede,” said Paet.
According to Foreign Minister Paet, Estonia hopes that the name dispute with Greece will soon be resolved and Macedonia will become a member state of both NATO and the European Union.
While talking about Macedonia’s prospect for visa freedom with the EU, Foreign Minister Urmas Paet expressed hope that it would be possible to eliminate visa requirements for Macedonian citizens this year. Foreign Minister Milošoski stated that Macedonia has completed its preparations for visa freedom. “Estonia supports visa freedom to the European Union for all Western Balkan countries,” emphasised Foreign Minister Paet.
During their meeting, Foreign Minister Antonio Milošoski informed Paet of Macedonia’s intention to turn their existing diplomatic representation in Tallinn into the Macedonian Embassy in Estonia. Foreign Minister Paet stated that this would make the active relations between the two nations even tighter. During his visit to Macedonia last November, Foreign Minister Paet opened Estonia’s first honorary consulate in the Western Balkans in Skopje.
Another affirmation of tight Estonia-Macedonia relations is the 60 visits on various levels that have taken place between Estonia and Macedonia within the past two years. Foreign Minister Paet stated that Estonian businessmen have more contacts in Macedonia now. “However, we still have room for development in reciprocal trade and increasing investments,” said Paet. “We are ready to share our experience in building and implementing a strategic goods control system with Macedonia,” he added.
Foreign Minister Milošoski also met with Prime Minister Andrus Ansip, who congratulated Milošoski on the successfully organised elections. On 22 March, the first rounds of the presidential and local government elections were held in Macedonia.

Source: Estonian Review (vm.ee)

Decrease in transport services

According to the preliminary data of Statistics Estonia, in 2008 the usage of services of passenger transport enterprises decreased by about a tenth compared to 2007. The volume of carriage of goods decreased by a fourth compared to the previous year.

In 2008, the number of passengers carried by Estonian transport enterprises was over 193.4 million. 93% of passengers used road transport (incl. city transport by buses, trams and trolley buses), 4% sea transport, 3% rail transport and less than 1% air transport.

Around 186.6 million passengers were carried in domestic traffic, the number of passengers decreased by a tenth compared to the previous year. 80% of passengers in domestic traffic used city transport. The number of passengers in domestic traffic using buses, rail and sea transport decreased, but it increased in domestic flights.

The amount of passengers in international traffic was around 6.8 million, 5% more than in 2007. The number of passengers in international traffic increased in sea, road and rail transport, but around a third less passengers used international flights compared to the previous year.

In 2008, the volume of goods carried by Estonian transport enterprises was 15.3 billion tonne-kilometres. In domestic traffic the freight turnover was 3.1 billion tonne-kilometres and in international traffic it was 12.2 billion tonne-kilometres or 80% of the total freight turnover. The freight turnover was mainly influenced by road and rail transport in international traffic, where the freight turnover decreased by 28% and by 32%, respectively, compared to the previous year.

Passenger transport, 1998–2008

Source: Statistics Estonia