Housing loans were up by 14 percent, with consumer loans growing even faster - by 17 percent year-on-year, according to the Financial Stability Report presented by the National Bank of Slovakia (NBS) banking council and the executive director of its market supervision unit Vladimír Dvořáček, the TASR newswire reported on November 26.
“Several factors contributed to this, especially the continuing drop in interest rates,” Dvořáček said, as quoted by TASR. “There is a strongly competitive market, the population’s disposable income has been rising, and the jobless rate has been falling. Developments on the property market also play a role.”
A considerable rise in corporate loans was also observed following several years of either moderate increases or things largely remaining still. Loans in the sector as a whole grew by 3.5 percent during this nine-month period. When the public sector is removed from the equation, the increase amounted to as much as 10 percent.
“The financial standing of enterprises has improved, the number of businesses who requested funding from banks went up,” Dvořáček said, as quoted by TASR. “The credit quality of the portfolio of corporate loans across the individual sectors has risen, and we’re also observing a significant rise in the sector of small and medium-sized enterprises, which we view in a positive light.”
Notwithstanding the favourable developments, certain risks persist in the sector. A rapid rise in retail loans carries with it an increase in household debt, which rose above the Central and Eastern European average.
“This comes down to the fact that household credit in proportion to income growth is rising the fastest among European Union-member countries,” Dvořáček said, as quoted by TASR.
27. Nov 2015 at 1:24 | Compiled by Spectator staff