Bank lending in RO keeps supporting consumption more than companies

The stock of bank loans to the private sector accelerated marginally in August to a 3.7% annual growth rate, from 3.6% in July. In absolute terms, it hit RON 274.4 billion (EUR 56.6 bln).

In real terms, discounted for the consumer price inflation, the banks' private loan portfolio advanced by 1% on the year.

The stock of private bank loans rose by 0.9% in the month, again only marginally faster than the 0.8% advance in July.

The fragile growth was deeply unbalanced between households and firms: while the stock of loans to households rose by 10.5% year-on-year to RON 115 bln, the loans to firms edged up by a mere 0.8% to RON 72.6 bln.

The corporate loans have not even kept pace with inflation, as of July, while the households kept borrowing with a significant impact on private consumption.

According to Romania's National Bank (BNR) data, the stock of loans advanced by 7.1% year-on-year as of the end of March, but the annual growth slowed afterwards to 5.7% in April, 4.5% in May, and 4.1% in June.

Bank debtors in trouble because of the pandemic's effects can still defer their repayments by the end of the year, which has had a net positive impact on the stock of loans.

From January 2021, when the deferred installments should be paid together with the normal installments, an opposite effect may take place, depressing the banks' loan portfolios.

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