Portrait of an Ascending Sovereign Credit
Lending remains subdued
The recovery in growth of loan portfolio is delayed due to pandemic-related economic uncertainty
•
Loans to Domestic Clients
(yoy)
Key Highlights
8%
Loans to domestic households and NFCs stand at 33% of GDP, down from
almost 100% at the outset of the global financial crisis
6%
4%
Lending had been subdued before Covid-19 outbreak and lending to NFCs is
expected to remain weak in 2021. Housing loans have demonstrated growth
(with one-effect effects due to the structural changes in July 2021)
The impact of Covid-19 on the economy has not been reflected in the overall
quality of bank loan portfolio yet; the coverage ratio of 90 days overdue loans
remained high. Government support and private forbearance measures have
been limiting growth in credit risk in the short term
-6%
2%
0%
2012
2013
2014
-2%
-4%
MM
20%
15%
10%
5%
Total Loan Portfolio Quality
0%
2011 2012
2013
2014
Source: FCMC, Credit Register
2015 2016 2017 2018 2019 2020
Share of loan loss provisions in outstanding loans
Share of loans over 90 days past due in outstanding loans
15
2021
-8%
Source: ECB
152.2
2015
2016
2017
2018
2019
202
NFCs
HHs
*The time series have been adjusted excluding the one-off effects of loan write-offs,
exchange rate fluctuations, reclassification, etc.
Domestic Loan-to-Deposit Ratio
(%)
186.6
■2011 Sept. ■2021 Sept.
140.2
93.4
76.8
65.5
114.0
88.0
Estonia
Lithuania
Latvia
Euro Area
Source: ECBView entire presentation