Financial intermediation loses ground in Romania on sluggish lending

The stock of non-government bank loans in Romania increased by 0.6% m/m and 5.4% y/y to RON 384.2 billion (EUR 77 billion) at the end of November.

The annual growth rate, dragged down by more cautious household borrowing and moderate corporate lending, remained inferior to consumer price inflation (+6.7% y/y in November) and to the 13% nominal advance estimated for Romania’s GDP in 2023 compared to 2022.

Thus, the bank loans-to-GDP ratio decreased to 24.3% at the end of November 2023, compared to 26.0% one year earlier.

The stock of corporate loans (RON 193 billion at the end of November) increased slightly faster than the overall stock of bank loans, by 8.7% y/y – still not enough to prevent a decline in the loan-to-GDP ratio that edged down to 12.2% at the end of November 2023, from 12.6% one year earlier.

However, retail lending marked a comparatively weaker performance, and thus, the households’ indebtedness (+1.2% y/y to RON 174 billion at the end of November) accounted for only 11% of GDP at the end of November 2023 from 12.3% one year earlier.

(Photo source: Ungureanu Vadim/Dreamstime.com)