The Demostat research center said on Tuesday that the average interest on new Dinar loans to households stands at 12.92 percent which is 4.39 percent higher than a year earlier.

It said that banks made most of their profits on interest on loans to households, benefiting from rising inflation to increase their earnings. It recalled that the National Bank of Serbia (NBS) raised its key policy rate 12 times in the past year from 1 percent to 5.75 percent.

“According to NBS data, banks paid 3.08 percent interest on average on all deposits which is 1.92 percent higher than a year earlier. At the same time, banks started charging 2.4 percent more on existing loans raising the average interest rate from 4.34 to 6.74 percent,” Demostat said.

Interest on deposits by households were raised by 0.86 percent and by 3.21 percent for companies. Interest rates on new deposits were raised 1.82 percent for households and 3.51 percent for companies, it said.

Demostat said that interest rates in Serbia were higher than in the rest of the region.