TALLINN - The level of overdue loans and owed interest in Estonia's banking system rose to 5.8 percent of the total loan portfolio in May from 5.2 percent in April, the central bank said on Thursday.
It said outstanding loan stock plus owed interest increased to 14.7 billion kroons ($1.47 million) from a revised 13.2 billion kroons.
Estonia's banking system is 95 percent controlled by four Nordic financial groups with Swedbank (SWEDa.ST: Quote, Profile, Research, Stock Buzz) owning market leader Hansabank and SEB Eesti (SEBa.ST: Quote, Profile, Research, Stock Buzz) both dominating the market in a country with just 1.3 million people.
Moody's rating agency recently gave Estonia's banking sector "a negative outlook" due to a growing risk of a decline in asset quality and liquidity in light of the rapid growth of loans in recent years. This has also affected share prices of Nordic banking groups.
Loans overdue without interest rose to 1.2 percent of the loan portfolio in May from 0.9 percent in April.
The total loan portfolio rose to 253.8 billion kroons in May from 253.0 billion kroons in April.
Loans overdue for more than 60 days rose to 3.5 billion kroons in May from 2.99 billion in April. Overdue housing loans rose to 4.5 billion kroons in May from 4.3 billion in the previous month.
Reporting by David Mardiste ; Editing by Gerrard Raven
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Posted by: personal loans | July 12, 2008 at 12:09
Definitely a reflection of the economy as a whole. Not only housing prices drop but the collapse of the credit markets. Eventually we will ride out this problem, but if you have cash now there are some bargains to be had.
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Posted by: dan | June 28, 2008 at 06:14