Credit growth in Macedonia is expected to spike in 2010 and 2011 as local lenders step up their product launches. The country's credit growth rate is expected to accelerate to 9.4% in 2010 as the banks' loan portfolio has already risen by an annual 7.7% to 188.6bn denars ($4.1bn/3.1bn euro) at the end of the third quarter, the Macedonian National Bank, NBRM, said earlier this month.
The loan portfolio of domestic banks grew by only 3.5% in 2009 to 178.2bn denars after a torrid 34.4% growth in 2008. The acceleration of the pace of lending after last year's slowdown is spurred by expectations for higher deposit levels and increased demand for loans, NBRM said in its 2011 macroeconomic forecast.
The central bank has forecast a credit growth of 12.1% for 2011, based on an outlook for improved macroeconomic conditions, higher consumption and lower lending risk.
New loans will be financed mainly by the increase in deposit volumes whereas the rise in private sector deposits is fuelled by the pick-up in economic activity, the central bank said.
Deposits with Macedonian banks rose by 14.4% on the year to 203.6bn denars at the end of September.
At the same time, NBRM expects the country's economy to grow by 2.0%-3.0% in 2011 after it projected a growth of 0.6% for this year. A total of eighteen banks operate in Macedonia, a country of 2m people.
Some of the mid-sized players are raising the ante in the competition with their brawnier rivals by launching new loan products while others have cut interest rates and raised deposit rates in a bid to attract clients and improve their market position.
Earlier this month, Izvozna i Kreditna Banka (IK Banka) signed a 5m euro loan agreement with the Green for Growth Fund Southeast Europe for energy efficiency projects. It makes IK Banka the first bank in Macedonia to sign a loan with GGF and the first to offer household loans for such projects.
These types of loans were previously not available or were accessible only for large companies, IK Banka's chief executive director Yucel Inan said at the signing ceremony. We have increased our lending activity in 2010 and we will continue to provide new and sophisticated offers to our clients in all segments," Inan said.
IK Banka is majority-owned by Netherlands-based Demir-Halk Bank. Sparkasse Banka Makedonija, part of Austria's Steiermarkische Bank und Sparkassen, recently launched a new loan product aimed at the farming sector.
The size of the loans ranges between 100,000 and 700,000 euro. The interest rate for loans with a foreign currency clause varies between 4.0%-5.0% while for loans denominated in euro and denars the rates are set at 8.45% and 13%, respectively. The repayment period is up to seven years with a three-year grace period.
Going forward, loan conditions will be eased while lending support for the economy will strengthen, Sparkasse Banka managing board president Srgjan Krstic told Skopje-based daily Utrinski Vesnik in a recent interview.
This is noticeable in the increased supply and demand for loans, lower risk in the real economy and stronger competition among banks attempting to raise their market share, he told Utrinski Vesnik.Skopje-based ProCredit Bank recently cut the interest rates of loans for micro businesses by 1.0%-5.0% and extended the repayment period to 60 months in a bid to support their growth, the bank's general director Jovanka Joleska Popovska said in a statement sent to SeeNews. In an attempt to boost its deposit base, one of the country's smaller lenders, Univerzalna Investiciona Banka, is offering an interest rate of 8.88% for one-year time deposits, much higher than its bigger rivals. At the same time, the three biggest banks in Macedonia, Komercijalna Banka, Stopanska Banka and NLB Tutunska Banka, offer one-year time deposits in the local currency at rates of 7.3%, 7.2% and 7.2%, respectively.One-year time deposits in euro at Komercijalna, Stopanska and NLB are offered at rates of 4.0%,4.85% and 4.0%, respectively.
News source: Balkans.com link: article
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