Slovakia's annual credit growth turns negative in April 2013

By bne IntelliNews May 31, 2013

The total value of outstanding bank loans in Slovakia fell 0.3% y/y to EUR 42.05bn as of end-April 2013, recording its first annual decline since November 2010, data by the central bank showed. In March, the value of outstanding bank loans grew 1.1% y/y. Commercial banks' corporate loan book narrowed by 3.4% y/y as of end-April, deepening from a 1.5% y/y decline in the previous month. The yearly growth in lending to households accelerated slightly to 9.4% from 9% in March.

On a monthly basis, the total value of outstanding bank loans fell 0.4% in April, following a 0.7% growth in March.

In April alone, the Slovak banks extended a total of EUR 1.51bn in new loans, compared to EUR 1.57bn in March and EUR 1.41bn April in 2012.

IntelliNews comment: The lending activity in Slovakia's banking sector weakened last year given the fragile domestic economic situation, deteriorating outlook and mounting risks in the external environment. The outstanding amount of corporate loans fell mainly due to the tightening of credit standards.

We expect the lending market to be sluggish this year as corporate credit growth is set to hold back in line with the economic slowdown, which may also affect retail lending, as demand for loans might dwindle in a weakening labour market. New, stricter bank regulations are also exerting pressure on the lending market.

Loans granted, outstanding amounts, EUR mn   Apr-13 Mar-13 Apr-12 y/y change m/m change
Loans - total 42,048.6 42,230.9 42,159.1 -0.3% -0.4%
Loans to non-financial corporations 15,760.3 15,937.4 16,307.5 -3.4% -1.1%
Loans to households 19,189.7 19,046.6 17,548.4 9.4% 0.8%
Loans for house purchase 17,074.2 16,993.7 15,679.5 8.9% 0.5%
Consumer loans 2,591.7 2,562.8 2,271.5 14.1% 1.1%
New Loans, EUR mn          
New Loans - total 1,507.2 1,574.9 1,414.4 6.6% -4.3%
--operating loans 697.0 822.1 683.6 2.0% -15.2%
--investment loans 78.7 99.1 129.1 -39.0% -20.6%
--consumer loans 128.3 135.5 100.0 28.3% -5.3%
--loans for house purchases 428.0 407.2 412.9 3.6% 5.1%
----mortgages 79.3 68.4 62.7 26.4% 15.8%
----building loans 2.9 1.5 4.0 -28.3% 99.2%
----intermediate loans 59.0 46.3 55.1 7.0% 27.5%
----other loans for house purchases 286.8 291.0 291.1 -1.5% -1.4%
--other loans 175.2 111.0 88.9 97.2% 57.9%
Source: National Bank of Slovakia          

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