Slovaks have been record-breaking in recent years



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According to the investment company Across Private, there is a great demand for loans in Slovakia.

Slovaks have been record-breaking in recent years. Demand for loans is sustained by low interest rates, competition between banks and favorable economic development.

Investment firm Across Private Investments has estimated that in the past six years the volume of lending to households has doubled, with residents and traders closing at 35.4 billion euros in banks at the end of last year. The same group of people lent approximately € 35.8 billion from the banks.

"The net worth of Slovaks in the banks came to a negative value, two years ago, worth 3.1 billion euros. In other words, over the last two years, people have borrowed € 7.1 billion from banks and put only € 3.7 billion in them, "says Maroš Ďurik, CEO.

Demand for housing

The increase in indebtedness in Slovakia has been highlighted by the NBS for a long time. Private sector indebtedness in the third quarter even surpassed 100% of Gross Domestic Product (GDP) for the first time. "While the growth rate of the private sector debt index is gradually declining, Slovakia is already above the average for Central and Eastern European countries," said NBS in its latest report. "This will increase household and corporate debt. quarterly commentary on macroprudential policy.

The average indebtedness of the private sector in the EEC region is 90% of GDP. While the countries in this region with more indebtedness than Slovakia, according to the NBS, have been reducing their debt in recent years, the Slovak private sector has spent the fastest pace among the EU countries in this period.

Dynamic growth is recorded mainly by mortgage loans. According to Durk, this can be attributed to the high demand of young people for their own dwelling, but also to the drop in interest rates. According to Across, in 2016, the average annual interest rate was 4.3%, in 2017 it was 3.8% and last year it was 3.5%. The average interest rate on new residential loans reached a new low of 1.5%. "The difference between interest, loans and deposits gained two billion euros last year, with over 600 million euros," Ďurik said. According to preliminary data, the EBITDA of the banking sector increased 4.7% over the previous year to 640 million euros after taxes.

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