The Central Bank of Estonia published a statistical release on banks and lease companies showing that lending by banks operating in Estonia expanded strongly in 2025, with the aggregate loan portfolio up 7% or EUR 1.9 billion, while domestic deposits grew more slowly. Housing loans drove the fastest growth, with the stock of housing loans rising by over 10% by year-end. Other household loans and leases were broadly unchanged from 2024, mainly reflecting softer demand for car leases, while the corporate loan portfolio grew by around 6%, led by borrowing in real estate and construction and in the primary sector, where the stock of loans increased by around 10%. With deposits rising more modestly, banks’ lending decisions are increasingly dependent on funding from sources such as non-resident deposits, intra-group lending and bond issuance; corporate deposits were up almost 3% and household deposits around 5% (EUR 970 million), while term deposits fell to 9% of deposits (EUR 650 million). Banks’ net profit excluding dividend income from non-residents was EUR 155 million in the fourth quarter and EUR 652 million for 2025, around a fifth lower than in 2024, with strong lending growth and a low share of overdue loans partly offsetting the effect of lower Euribor. With Euribor having been relatively stable since the summer and markets not expecting substantial near-term changes in rates, the release notes that profitability will depend particularly on future loan portfolio growth.

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