Despite rising interest rates, loans to households accelerated for the third consecutive month

Today, the Bank of Lithuania published the monetary financial institution (MFI) balance sheet and interest rate data for May 2023, which show that:

loans granted by credit institutions to Lithuanian residents increased¹ by €58.3 million, or 0.2%, over the month (the annual growth rate² stood at 9.0%). Loans to Lithuanian households rose by €93.5 million, or 0.7%, and those to non-financial corporations decreased by €89.8 million, or 0.9%. The growth of loans to households was slower since September 2022 and has picked up since March 2023. Loans to the financial sector³ and general government grew by €50.8 million and €3.8 million respectively. At the end of May 2023, loans to these sectors amounted to €14.0 billion, €10.1 billion, €2.2 billion and €327.9 million respectively (see Chart 1);

loans to Lithuanian households for house purchase, consumption and other purposes granted by credit institutions increased by €69.9 million (0.6%), €22.4 million (2.3%) and €1.1 million (0.1%) respectively, or 0.6%, 2.3% and 0.1% over the month, to stand at €11.7 billion, €991.5 million and €1.3 billion respectively. The annual growth rates of loans for house purchase and consumption were 9.4% and 17.5% respectively, while loans for other purposes decreased by 1.5% year on year (see Chart 2);

deposits of Lithuanian residents with credit institutions rose by €76.8 million, or 0.2%, over the month (their annual growth rate was 11.7%). Deposits of Lithuanian households and non-financial corporations increased by €114.6 million (0.5%) and €35.5 million (0.3%) respectively (their annual growth rates stood at 6.7% and 20.1% respectively). Financial sector deposits also increased in May (by €61.3 million to €922.5 million), while general government deposits decreased by €134.8 million to €4.2 billion at the end of the month. At the end of May 2023, non-financial corporation and household deposits amounted to €10.8 billion and €21.3 billion respectively (see Chart 3);

overnight deposits of Lithuanian households and non-financial corporations with credit institutions decreased by €456.1 million and €265.5 million respectively over the month, or 2.7% each. At the end of the month, the outstanding amounts of overnight deposits of these sectors stood at €16.3 billion and €9.5 billion respectively. Household and non-financial corporation deposits with agreed maturity with credit institutions grew by €576.3 million and €277.3 million respectively over the month, to €4.9 billion and €1.1 billion respectively;

interest rates⁴ on new business of loans⁵ granted to households by credit institutions went up by 0.04 percentage points to 6.53%. Interest rates on loans for house purchase rose by 0.11 percentage points, while those on loans for consumption and other purposes fell by 0.04 percentage points and 0.15 percentage points respectively. In May 2023, interest rates on these loans comprised 5.39%, 9.44% and 7.46% respectively (see Chart 4).

Chart 1. Loans granted by other MFIs to Lithuanian residents, excluding MFIs (outstanding amounts, end-of-period)

Chart 2. Loans granted by other MFIs to Lithuanian households (outstanding amounts, end-of-period)

Chart 3. Deposits of Lithuanian residents, excluding MFIs, with other MFIs (outstanding amounts, end-of-period)

Chart 4. Interest rates on new business loans for households

Statistics, Monetary and financial statistics