Business loan

Banks concerned about low activity and falling volume of loans to small businesses | News

The Estonian Banking Association said the corporate loan portfolio fell below 300 million euros for the fourth month in a row.

The private loan portfolio exceeded 10.5 billion euros at the end of March. Banks are recording gains on business loans this spring well below normal, while the portfolio has increased a little further and is approaching 8.5 billion euros.

The volume of loans more than 60 days past due increased for the second consecutive month to reach 23.4 million euros. The volume of problematic private loans has also started to grow and now stands at 18 million euros. The volumes concerned were 28 million euros and 41 million euros a year ago.

Even if Estonian households and businesses are doing well and the next heating season is still a long way off, the rapid and widespread rise in prices will soon start to affect livelihoods, with preparations in order, Allan Parik, CEO of the bank SEB and Chairman of the Board of the Estonian Banking Association, said.

“We are made cautious by below-normal business activity and slightly increasing arrears. Unfortunately, uncertainty continues to grow and we will have to bend – stock market fluctuations and rapid inflation are expected to continue in the coming months,” Parik said. suggested.

The executive said problems were expected to accumulate in some industrial sectors and in construction that require production inputs that previously came from Russia or Ukraine. “Highly volatile energy prices and uncertainty as the new heating season approaches only add to the confusion.”

The association pointed out that banks are willing to deploy various solutions to help businesses in cooperation with the public sector.

“The Estonian Banking Association has sent a number of proposals to the Ministry of Economic Affairs and Communications on how to support Estonian businesses which in turn help to maintain jobs,” Parik said, adding that he hope the association and ministry can work out solutions before they are needed.

Commercial banks continue to be troubled by various cases of telephone and online fraud. Monthly fraud-related damages still amount to hundreds of thousands of euros, with no signs of improvement on the horizon, the association said.

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