According to some analysts, the major Estonian commercial banks’ profits remain solid, despite lower interest rates.

Future results depend on loan growth, while costs can be cut by reducing deposit rates.

Leaving aside the impact of falling interest rates on profits, the commercial banks’ results are quite solid, in the view of the Bank of Estonia (Eesti Pank).

“The profitability of banks operating in Estonia remains quite strong by international standards. If we look at the profitability of the last couple of quarters, then in Estonia it’s been at a fairly typical level — one we’ve seen as the average over a longer period,” Bank of Estonia economist Taavi Raudsaar told “Aktuaalne kaamera.”

Since the financial markets expect the Euribor to remain at or near its current level over the long term, the effect of interest rate fluctuations on banks is now mostly a thing of the past, and going forward, profits will increasingly depend on how successfully the banks can expand their loan portfolios, Raudsaar noted.

Read more: ERR.EE