Slovakia's annual credit growth declines to 4% in Dec 2011.

By bne IntelliNews February 1, 2012
The value of outstanding bank loans in Slovakia stood at EUR 40.1bn at the end of December 2011, as their annual growth rate fell to 4% from 5.7% in the previous month, central bank data showed. Loans to corporate clients rose 7.1% y/y in December to EUR 16.2bn, up from a 4.2% annual growth in November. Lending to households remained stable, as loans totalled EUR 16.9bn, up 10.2% y/y, almost the same as in the previous month, with loans for house purchase climbing 9.8% to EUR 15.4bn and consumer credits expanding 6.2% to EUR 2.2bn in December. IntelliNews comment: The central bank figures show that the market has stabilised after the considerable slowdown in the lending activities of Slovak banks in October, as corporate lending gained ground. However, we expect the lending market to decelerate further, as corporate credit growth will slow down in line with the expected economic downturn. The economic holdback will also affect retail lending, as it will hit the labour market and thus reduce demand for loans. New, stricter bank regulations, which will become effective this year, will also put pressure on the lending market.

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