The sum total of new housing loans was 14 percent bigger than in February 2017, and the portfolio of housing loans increased by 6.9 percent over the year to 7.1 billion euros. The car lease portfolio expanded by 19 percent.

Mari Tamm, economist at the Bank of Estonia, said that the growth in car leases has been driven partially by the changes to the rules concerning the taxation of company vehicles effective from the start of 2018, which have resulted in the registration of vehicles previously reported as company cars to the name of private individuals. The year-to-year growth in the portfolio of overdrafts and credit card loans slowed down to 1.7 percent.

Estonian companies borrowed actively in the first months of 2018. Borrowing activity was boosted by somewhat higher investment activity and good access to domestic bank loans. New long-term loans and leases taken out in the first two months of the year grew by approximately 30 percent over the same period of last year.

"Companies in almost all sectors took out more long-term loans than a year earlier, and the largest taker of the new loans was the real estate and construction sector. The portfolio of corporate bank loans was still smaller than a year ago though, as one bank transferred a part of its loans to the portfolio of its foreign parent bank in the autumn. Without this the portfolio of corporate loans, leases and factoring would have grown by 6-7 percent over the year," Tamm said.

The average interest rates on new loans have risen slightly at the start of this year. The average interest rate on new housing loans issued in February was 2.3 percent, which is similar to the average rate last year. The average interest rate on new long-term corporate loans was 2.6 percent in February. The average interest rate depends largely on which companies have signed loan contracts for which projects in the particular period, and so can fluctuate quite widely.

The good state of the economy and low interest rates mean that the loan quality of the banks remains good. There were €146 million of overdue loans to companies and households at the end of February, accounting for less than one percent of the portfolio. The share of loans that are overdue was smaller than in February 2016 in almost all sectors.

As companies and households have borrowed extensively, financial buffers have also continued to increase. The bank deposits of Estonian companies and households grew by 10 percent over the year to €13 billion. Growth in the deposits of households has been built on strong growth in incomes. Deposits grew a little more slowly in February than at the end of last year, but at a rate that is still rapid. The bank deposits of households grew by 9.4 percent over the year to seven billion euros, while the deposits of companies were up 11 percent.