BRATISLAVA, February 23, (WEBNOVINY) – The banking sector provided housing loans in the volume of EUR 927 million in the last quarter of 2010, which is an increase of EUR 96 million from the previous quarter. In yearly terms, the figure swelled by EUR 305 million. Data of the National Bank of Slovakia (NBS) further show that the growth in new loans translated in the growth of cumulative volume, too. A portion of the loans was likely used to repay older, less advantageous loans, the central bank commented. Last year, people in Slovakia borrowed over EUR 3 billion for housing purposes, which means a return to the pre-crisis levels. Banks assume that demand for new loans could rise further this year.
According to Juraj Barta, senior economist with Slovakia’s largest bank, Slovenska Sporitelna, the growth in new housing loans can be attributed to low interest rates and low real estate prices. He specified that interest rates hit their historical low last year. The central bank confirmed a decline in interest rates by 0.5 percentage points from the end of the third quarter. The banks thus concentrated on marketing offers to attract new clients and refinance older loans, the central bank added. The falling tendency of interest rates was reported in particular in other real estate loans.
At the end of 2010, the cumulative volume of defaulted housing loans amounted to EUR 347 million, down EUR 12.3 million from the previous quarter. The volume of defaulted loans decreased after growing in the previous quarters, which can be attributed to the sale of these loans. Categories with a decline of bad loans were in particular mortgages and home savings loans. The portion of defaulted loans on the total volume of housing loans moderately dropped to 3.4 percent in late 2010.
SITA