At the end of July 2023, the total amount of loans issued by all the Slovenian financial institutions increased by 0.6% YoY, and 0.2% MoM. At the same time, the average housing loan interest rate grew amounted to 4.03%, an increase of 0.4 p.p. YTD, and 0.01 p.p. MoM. Finally, the average consumer loan interest rates amounted to 6.8%, an increase of 0.11 p.p. YTD, and 0.12 p.p. MoM.
Recently, the Slovenian Central Bank, BSI, released the latest report on the changes and developments recorded by the Slovenian financial institutions. In this article, we’ll review the active, i.e. loan side of the Slovenian financial institutions, with the latest data referring to July 2023. According to the report, the total amount of loans issued by all Slovenian banks amounted to EUR 27.1bn, representing an increase of 0.6% YoY, and 0.2% MoM. Of this, corporate loans amounted to EUR 10.5bn, with a rise of 1.2% YoY, and remaining roughly the same MoM. Meanwhile, housing loans amounted to EUR 8.1bn, growing by 2.3%, but remaining unchanged MoM. Finally, consumer loans amounted to EUR 2.62bn, representing an increase of 6% YoY, and 1.8% MoM.
Housing and corporate loan growth rate (2017 – July 2023, YoY, %)
Source: BSI, InterCapital Research
Here we can see that there has been a considerable slowdown in the new loan production across the board, with 2022 recording double-digit growth YoY, but the situation continued to deteriorate across 2022, reaching the low single-digit that is present now. This would mean that the current macroeconomic environment is indeed weighing heavily on Slovenian consumers, who are being more cautious about taking new loans.
Besides looking at the new loan production, it is also prudent to look at the interest rates on these loans. For this, we looked at the newly issued fixed-interest rate loans. For housing, the avg. fixed interest rate amounted to 4.03% in July 2023, representing an increase of 0.4 p.p. YTD, and 0.01 p.p. MoM. Consumer loans recorded an interest rate of 6.79%, representing an increase of 0.11 p.p. YTD, and 0.12 p.p. MoM. Finally, corporate loans are broken down into 2 categories, ones that are smaller than EUR 1m (small corporate loans), and ones that are larger than EUR 1m (large corporate loans). For the smaller category, the average interest rate amounted to 6.17%, representing an increase of 1.48 p.p. YTD, and 0.18 p.p. MoM. For the larger loans, the average interest rate amounted to 3.76%, representing an increase of 0.25 p.p. YTD, but a decrease of 1.51 p.p. MoM.
Average fixed interest rate by categories (2017* – July 2023)**
Source: BSI, InterCapital Research
*For years until 2023, data refers to the yearly average
**In January 2023, no data is available for large corporate loans, and as such it is presented as 0
For the sake of comparison, we also looked at how Slovenia compares to Croatia, as well as the European Monetary Union, EMU.
Comparison of average fixed interest rate by categories in Slovenia vs. Croatia and EMU (July 2023, %)
Source: BSI, HNB, InterCapital Research
Currently, Slovenian housing loan interest rates are higher by 0.78 p.p. than the ones in Croatia, and 0.42 p.p. than the ones in the EMU. Consumer loans meanwhile, have a 1.11 p.p. higher interest rate than in Croatia, and a 0.93 p.p. lower interest rate than in the EMU. Small corporate loans have a 1.36 p.p. higher interest rate than in Croatia, and a 1.25 p.p. higher interest rate than in the EMU. Finally, large corporate loans have a 1.05 p.p. lower interest rate than Croatian loans and a 0.58 p.p. lower interest rate than the average EMU loans. From this data, it could be summarized that it is more expensive (relatively) to take a housing loan in Slovenia, it is less expensive to take consumer loans compared to EMU, but more expensive than in Croatia. Finally, small corporate loans are significantly more expensive than in either Croatia or EMU, while larger corporate loans are less expensive.
