Romania’s stock of bank loans down 0.8% y/y to EUR 50.3bn at end-Jul

By bne IntelliNews August 27, 2013

The stock of bank loans to the non-government sector in Romania decreased marginally by 0.8% y/y to EUR 50.27bn [RON 221.4mn] at the end of July, Romania’s central bank announced. When expressed in local currency terms, the annual drop was 4.4%.

The 0.8% y/y decline of credit as of end-July was due to the shrinking stock of i. consumer loans [by 7.2% y/y] and ii. corporate loans [by 1.5% y/y], insufficiently compensated by the robust 10.5% y/y expansion in mortgage loans.

Under a broader perspective, the stock of bank loans has slightly contracted over the past year and a half – despite the gradual economic recovery, the strengthening industrial activity and encouraging exports. The central bank has cut the monetary policy interest rate by 75bps in two steps – out of which the latter of 50bps at the beginning of August, in an attempt to stir the financial intermediation. Nonetheless, the banks are still reluctant to lend and the credit market remains in a deadlock.

While the stock of bank loans has virtually remained flat over the past couple of years, the share of loss-type loans increased by 8pps to 26% at the end of June 2013 [latest available data]. Adding to the bad loan definition the stock of doubtful-type loans, the bad loans share increased by slightly more than 8pps – but to a record level of 30.5% at the end of June.

Under a more detailed analysis, the NPL ratio calculated by the central bank increased by 7pps to 20.3% at the end of June.

LOANS Household Household:  Household:  Corporations:  Non-govt Govt TOTAL
EUR bn   consumer mortgage non-financial      
Dec-08 24.89 18.49 5.24 23.72 49.7 1.57 51.27
Dec-09 23.7 17.22 5.73 22.75 47.27 2.67 49.95
Dec-10 23.83 14.99 6.76 24.42 48.85 2.62 51.47
Dec-11 24.14 14.35 7.73 26.71 51.63 2.24 53.87
Dec-12 23.59 13.1 8.37 26.81 51 2.23 53.24
Jul-13 23.46 12.54 8.82 26.17 50.27 2.17 52.44
% of total 44.70% 23.90% 16.80% 49.90% 95.90% 4.10% 100.00%
y/y -0.10% -7.20% 10.50% -1.50% -0.80% 1.50% -0.70%
Source: BNR


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