Credit expansion continues

TALLINN - Estonian banks’ net income declined 22 percent in the first quarter from a year earlier, mainly due to lower net-interest income, reports Bloomberg. Profit dropped to “about” 81 million euros from 104 million euros, the central bank, based in the capital, Tallinn, said on April 23 in an e-mailed statement. Net interest income declined 16 percent in the same period due to low base interest rates, it said.

The Baltic nation’s lenders, led by local units of Stockholm-based Swedbank and SEB, reported underlying net profit increasing 8 percent last year as corporate lending recovered following a slump in 2008 and 2009 when the Baltic economies went through the deepest contractions in the 27-member European Union.
Swedbank, the largest Baltic lender, expects the corporate loan market in Estonia to continue growing this year as export-driven growth needs additional investment, Priit Perens, head of Swedbank’s local unit, said in an interview on Feb. 20.

Credit growth to companies and households accelerated in March to 2.8 percent from a year earlier from 2.4 percent the previous month, with the stock of loans and leases by companies having increased 7.1 percent on year by the end of last month, the central bank said. Amortization of mortgage loans still exceeded new loan issuance, which grew 22 percent on year, according to the central bank.

Savings growth accelerated to 8 percent from a year earlier, compared with 7 percent in February, the central bank said.