Macroprudential Commentary – September 2024

Mortgage market gradually recovering

The number of new mortgages is rising slightly, while their average size has not changed significantly. Banks have been very cautiously lowering mortgage rates. Consumer credit growth remains stable, while non-performing loan ratios remain at historical lows.

Corporate loan portfolio no longer contracting

Although banks’ outstanding portfolio of loans to non-financial corporations is smaller in year-on-year terms, it has stopped declining since April 2024. While lending to large corporates and the commercial real estate (CRE) sector has continued to decrease, lending to micro, small and medium-sized enterprises has been picking up in almost all sectors.

Slight upturn in prices of flats

Asking prices for flats have been rising slightly on a month-on-month basis. Prices are rising across all regions and property size categories. The situation is similar for new-builds. It is still too soon, however, to speak about the emergence of a new trend. As for housing affordability, it has improved slightly but remains low overall.

No change in the CCyB rate

The financial cycle is approaching its low point, and the downswing is no longer significant. At the same time, signs of recovery are emerging in multiple areas. NPL ratios remain low, and loan loss provisioning is lower than has been typical in recent years. On the other hand, the results of the latest stress tests confirm that risks related to the financial cycle and to CRE lending remain accumulated in banks’ loan portfolios. In this light, it is deemed prudent to keep the countercyclical capital buffer rate at its current level.

Also in this edition

• Are higher mortgage payments causing repayment problems?
• How does bank profitability in Slovakia compare with that in the rest of the EU?

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