STA, 25 February 2020 - The Bank Association has observed a "marked fall" in freshly approved retail loans in the months following the central bank's brake on lending to households, both for consumer and housing loans.
"In the field of consumer loans, the situation has resulted in net repayments - a nominal decline - which increased further in December," the association said on Tuesday.
Data that 13 banks submitted to the association show the number of newly approved consumer loans reduced from 10,816 in September and 13,484 in October to 5,566 in November, 5,009 in December and 6,277 in January.
40% Fall in Housing Loans, 60% in Consumer Loans, After Slovenia Tightened Credit Rules
The number of housing loans dropped from 1,154 in September, 1,701 in October, 1,160 in November, 984 in December and 1,019 in January.
The association did not offer year-on-year comparisons which would eliminate seasonal changes in trends.
The central bank has recently assessed that the implementation of its decision on macro-prudential restrictions on retail lending has partly affected lending trends.
However, Banka Slovenije also said it would be premature to draw any conclusions on the effects of the measure because it was necessary to take into consideration non-typical conduct by banks and borrowers in anticipation of the measure, and after its implementation, delays in loan drawing and the effect of holidays and season.
Central bank data show that housing loans increased by EUR 105 million and consumer loans rose by EUR 14 million in the final quarter of 2019, which compares to EUR 64 million and EUR 69 million, respectively in 2018.
Year-on-year growth in housing loans stayed at 5.8% in December, while the net monthly growth in those loans, at EUR 23 million, was lower than the average for 2019, at EUR 29 million.
Bank Calls for Review of New Loan Restrictions After Dramatic Fall in Mortgages, Consumer Lending
The growth in consumer loans, at an average rate of 11.7% in 2019, slowed down to 8.9% year-on-year in December following the central bank's restrictions on consumer lending.
An increase in the volume of consumer loans in October was followed by a decrease in November and December by EUR 15 million and EUR 21 million, respectively, the central bank said.
Banka Slovenije imposed lending restrictions to curb excessive consumer lending and cut loan maturity. It expects the lending level to be stabilised to better match other economic parameters and that consumer loans will be directed with respect to their purpose into housing loans even though they are less profitable for banks.
