Corporate Loans Decrease, Retail Ones Increase Compared to Previous Year

The credit activity of banks has continued to slow down in the third quarter and, in September, the state of domestic loans, excluding the effect of the exchange rate change, was nearly unchanged (lower by 0.1%) compared to September 2022, says the credit activity report of the National Bank of Serbia (NBS).

Corporate loans were lower by 1.8%, and retail loans were higher by 1.6% compared to a year before.

– The slowing down of the domestic credit activity is a consequence of the high base from the previous year, due loans from the guarantee schemes, higher interest rates on loans due to the tightening of the monetary policies of the European Central Bank and the National Bank of Serbia, and the stricter credit standards of the banks – says the NBS report.

Corporate loans, excluding the effect of the exchange rate change, increased by RSD 19.2 billion, or by 1.2%, in the third quarter, on the basis of the increase in investment loans, and liquidity and working assets loans also contributed to the growth, although to a lesser extent.

The lower growth of the liquidity and working assets loans was down to the increased profitability of the economy and the due loans from guarantee schemes, whereby the influence of the due loans, which was the most pronounced in the first half of the year, is gradually weakening as the amounts of the due loans are dropping.

The due loans from the guarantee schemes also reflected on the drop of loans to micro, small and medium enterprises, whereas the borrowing of large enterprises increased.

Observed by activities, an increase in borrowing in the third quarter was recorded in companies from the fields of the manufacturing industry, real estate and transportation, whereas energy companies repaid their debts the most.

In the third quarter, retail loans, excluding the effect of the exchange rate change, increased by RSD 6.6 billion, or by 0.4%, on the basis of the increase of cash loans, whereas the state of housing loans lowered compared to June.

Such trends led to an increase in the share of cash loans, the most represented category in the total retail loans, to 44.3% in September, whereas the share of the next most represented loans, housing loans, was 39.7%.

Narodna banka Srbije Beograd

National Bank of Serbia

NBS

credit activity

retail loans

corporate loans