The Estonian Financial Supervision Authority (FSA) has said the most difficult time for banks during the coronavirus crisis has passed and at the end of the second quarter requests for loan holidays has ceased.
In the second quarter (April, May and June), the loan stock of the banking sector decreased by 0.7 percent year-on-year to €27.5 billion. In the previous quarter (January, February and March), the loan balance grew by 0.9 percent year-on-year.
In its sector review, the authority noted that by the end of June, the most difficult period for banks caused by the crisis had passed and the request for payment leave had ceased.
Compared to the first quarter, the loan balance of the Estonian banking sector decreased by 0.8 percent. The decrease in the volume of the loan portfolio is mainly due to the decrease in the volume of corporate loans.
The volume of loans issued to non-financial corporations decreased by 2.3 percent year-on-year in the second quarter. The loan volume of private sector enterprises decreased by 2.7 percent and the loan volume of state-owned enterprises increased by 3.4 percent.
Loans granted to financial corporations decreased by 11 percent in the second quarter. The effects of the coronavirus crisis on lending can be seen when compared with the previous quarter - the loan balance of both financial and non-financial corporations decreased by 2.1 percent during the quarter, to €3.3 and €9.7 billion, respectively.
The impact of the decline in the corporate loan portfolio on the sector's total loan portfolio was offset by an increase in household loans by 0.4 percent quarter-on-quarter and by 3 percent quarter-on-quarter. At the end of the second quarter, household loans amounted to €13.6 billion.
Insurance premium volumes also started to recover in the second quarter.
Editor: Helen Wright