The National Bank of Serbia published its Trends in Lending Activity report for the fourth quarter of 2024, showing faster year-on-year growth in domestic bank lending to the non-monetary sector alongside declining interest rates. Total domestic loans rose 8.2% year-on-year in December excluding exchange-rate effects, driven primarily by household lending, while the share of non-performing loans fell to a new low of 2.5%. Household loans grew 10.4% year-on-year in December and increased by RSD 34.2 billion during the quarter, mainly through cash loans (RSD 21.3 billion) and housing loans (RSD 12.0 billion), with newly approved household loans totalling RSD 237.2 billion. Loans to the economy grew 4.8% year-on-year in December and rose by RSD 6.2 billion in the quarter, with investment lending the main driver; micro, small and medium-sized enterprises accounted for 60.8% of corporate loans, and newly granted corporate loans reached RSD 432.6 billion. The weighted average interest rate on newly granted dinar loans fell to 10.3% for households and 7.2% for businesses, while euro and euro-indexed rates declined to 5.8% and 5.9% respectively; dinarisation increased to 37.4% of total placements (20.9% for the economy and 55.4% for households). The report also notes the extension of temporary interest-rate limits on housing loans through 2025 with a 5% maximum, and highlights capital adequacy rules from 2025 that require capital reductions if post-1 July 2023 foreign-currency and foreign-currency-indexed lending exceeds set thresholds. Survey results cited in the report indicate that banks slightly eased standards for corporate lending in the fourth quarter but expect tightening and lower corporate loan demand in the first quarter of 2025, while household lending standards were eased more than previously expected and banks anticipate further easing and continued growth in household loan demand.

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