The financial sector remained stable despite the crisis caused by the new coronavirus pandemic, and delays in loan repayments did not cause such problems as expected, representatives of the Slovak Central Bank (NBS) stated on Tuesday. Most people who have postponed their loan installments have already returned to repayment. The bank sees possible problems with 0.6% of loans to households and 0.5% of loans to enterprises.
However, economic developments in the coming years are uncertain and the bank is raising a warning finger that the pandemic is not over. Risks may still materialize, both in the household and corporate sectors. There is also a long-term risk associated with a period of low interest rates - these have an impact on the sustainability of the business model of banks. The central bank also warns that there are more housing loans which borrowers will continue repay even after retirement.
In its May report on financial stability in loan margins, the NBS noted that housing loans grew almost in the same way as before the crisis, by 9.3% year-on-year, while demand for consumer loans fell by 8.5%. However, it pointed out that the share of indebted households due to mortgages and other type of housing loans increased from 20.3% to 22.7%.
