Romanian bank loans increase by 8.4%y/y in September, outpaced by deposits

The stock of bank loans in Romania rose by 8.4% y/y to RON 413 billion (some EUR 82.6 billion) at the end of September, gaining momentum from +7.7% y/y in August and +6.8% y/y at the end of July, according to data published by the National Bank of Romania.

Deposit accumulation is even faster, and the stock of bank deposits rose by 8.6% y/y to RON 595 billion (EUR 120 billion) at the end of September, resulting in a subunitary value of the loan-to-deposit ratio.

Not surprisingly, the stock of loans to non-residents surged by 24% y/y to RON 156 billion (over EUR 31 billion). They are mostly loans to parent financial groups but still account for over a quarter of the volume of money held by the Romanian non-government sector (households and firms) in banks.

Consumer lending (+15.9% y/y) is visibly more activecompared to mortgage lending (+2.9% y/y) when it comes to retail (household) lending.

On the corporate lending side, short maturities (of up to a year) are preferred, and the volume of loans denominated in local currency with such maturities rose by 43% y/y. In contrast, the stock of bank loans denominated in local currency with maturities of above five years contracted by 2.8% y/y.

In general, the foreign-denominated loans lost their appeal, and the stock of such loans rose by only 2.6% y/y while still accounting for nearly a third of the total. The companies have used to contract such loans, and some of them have not entirely abandoned such a financing alternative.

(Photo source: Inquam Photos/Octav Ganea)