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BANKING
For several consecutive years the growth rates of household versus the loans to households in which
they account for only 0.3%.
loans have been significantly higher than the growth of the
Data for the first quarter of this year
loans extended to the economy. This undoubtedly means indicate an accelerated pace of growth of
non-performing loans in all segments of
that banks perceive the risks in the household sector as banks‘ portfolios, compared with the per-
formances in 2014. Thus the growth rate
significantly lower than those in the corporate sector of non-performing loans is at the level of
13.6% on an annual basis (16.2% for corpo-
In the past period the published data rate loans and 5% for loans to households).
clearly show that the driver of credit
growth are the household loans. For Amid historic lows in interest rates
several consecutive years the growth when banks feel the pressure on profit
rates of household loans have been margins, it is rational that banks focus on
significantly higher than the growth of areas where the perception of risk is lower,
the loans extended to the economy. This the opportunities for diversification of risk
undoubtedly means that banks perceive are higher, and placements carry higher
the risks in the household sector as sig- interest income. Yet, the developments in
nificantly lower than those in the corpo- the last two quarters give some indication
rate sector. This is empirically confirmed or signals for increased materialization of
by the difference in the delinquency rates risks in loans to households. Namely, in
on the loans in both sectors. Namely, ac- this period, for the first time in the past
cording to the latest available data, non- two years, the banks recorded a growing
performing loans account for 11.6% of to- annual rate of non-performing loans (2.7%
tal loans, which with minor fluctuations and 5%, respectively). Amid a relatively
from quarter to quarter, is a solid level stable macroeconomic environment, fa-
that banks have maintained in the past vorable trends in the labor market and
two years. However, there is a big gap in stable inflationary trends, it seems that
non-performing loans if one compares there are no external factors that could
the corporate and the household portfo- be rationally explained, which could influ-
lios. In fact, the share of non-performing ence the increase of delinquency on loans
loans in the former was 15.9%, while the to households. It is obvious that changes
latter had a share of 5.8% and registered in the risk profile of these loans with a cer-
a tendency of continuous decrease in the tain time lag are in correlation with what
past two years. To complete the image, happens in the banks‘ corporate portfo-
one should consider also the restructured lios, where much higher risks have been
loans, whose volume is not negligible. At recorded. However, there are other inter-
the level of the total loan portfolio they ac- nal factors that affect the growth rates of
count for 3%, with obvious dominance of non-performing loans.
corporate loans where restructured loans
account for 5% of total corporate loans In the past ten quarters, bank lending
surveys conducted by the National Bank
of the Republic of Macedonia showed a
net easing of credit conditions in the seg-
ment of household loans. In fact, last year
26% of the banks reported a net easing of
credit conditions, while in 2013 this rate
was 40%. In the first two quarters of 2015,
on average 22% of the banks reported fur-
ther easing of credit conditions. Home and
consumer loans lead in terms of the eased
conditions, primarily in the part of the in-
terest rates and the cost of credit, but also
in the collateral requirements and other
requirements related to the credit capac-
September 2015 49
