Bank lending in Romania decelerates to 7.7% year-on-year in March

The stock of non-government bank loans in Romania increased by 7.7% year-on-year to RON 255 billion (EUR 53.5 billion, just above 25% of GDP), as of March 31, 2019, the central bank announced.

The annual growth rate eased from 8.0% year-on-year in February and 8.4% year-on-year in January.

Loans to households totaled RON 135 billion (EUR 28 billion) at the end of March, while corporate loans were RON 113 billion (EUR 24 billion), with the rest being loans to financial entities, other than banks.

Retail mortgage loans denominated in local currency were up 23% year-on-year and reached one-fifth of total bank loans. Corporate loans, particularly in local currency and with maturities of over one year, expanded significantly as well by some 14% year-on-year.

Only a small part of the increase in the stock of loans (some 0.7 percentage points) was owed to the local currency’s weakening versus the euro since over 30% of the local bank loans are still denominated in euros. The EUR strengthened by 2.3% year-on-year versus RON at end-March.

Separately, the inflation having stabilized at significant levels (CPI inflation overshot 4% threshold as of March) means that the stock of loans increased significantly slower in real terms (or as a percentage of GDP).

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