Growth of Loan Interests Continues in Second Quarter – What Do Banks Expect?

During the second quarter of this year, the lending activities of banks continued slowing down, as shown by the report on the lending trends in banks by the National Bank of Serbia (NBS).

The year-on-year growth of the total lending of banks toward the non-monetary sector amounted to only 0.8% in June, whereby corporate loans dropped 1.1%, whereas retail loans increased 2.7%.

When it comes to corporate loans, liquidity and working assets loans are dropping, whereas investment and importing loans are growing.

Compared to September 2021, before the tightening of monetary policy began, the interest rate on dinar-denominated loans increased 4.7% on average.

The average interest rate on loans indexed in euros increased in this period by 0.4 percentage points to 7.2%.

The interest rate on the housing loans increased by as many as 0.7% percentage points to an average of 6.5%.

The banks continued tightening the lending conditions, which primarily pertains to the growth of interest rates for both dinar and FX loans.

Also, the banks expect the further tightening of the lending conditions in the third quarter as well.

Narodna banka Srbije Beograd

National Bank of Serbia

NBS

European Central Bank

ECB

lending activity of banks

corporate loans

retail loans

cash loans

housing loans

interest margins on loans