Stock of non-government loans driven by forex corporate lending in Romania

The stock of non-government loans in Romania increased by 6.4% y/y to RON 375.36 bln (EUR 75.62 bln) at the end of June, the National Bank of Romania (BNR) announced. Thus, the stock of non-government loans contracted by 3.5% y/y in real terms.

The high inflation has mainly impacted the retail segment of the market while the corporate segment is still dealing with the challenges as companies can adjust prices as well, CEO of BRD Bank Francois Bloch explained.

“The corporate area – SMEs and large companies – continued to borrow more, even significantly more, as companies continue to implement their development and investment plans,” he stated, quoted by Economica.net.

The euroization of corporate lending is visible as well, even if the foreign currency corporate loans still account for less than half of the total corporate loans (47.5% of the total).

The banker emphasized that there is still potential in the area of corporate lending, given that there are many projects that need financing, especially infrastructure projects, but also in other areas of the economy, such as agri/food, pharma or renewable energies.

“So far, we have good signals from the market, there is good repayment discipline, the cost of risk remains low, the macroeconomic outlook is good, so there is no reason why the general trends in the economy would change,” he stated.

The stock of loans denominated in local currency edged up by 0.2% y/y, far from the 10.3% y/y consumer price inflation, to RON 255 bln (68% of total bank loans). The local currency loans extended to households increased marginally by 1.8% y/y to RON 147 bln, but the local currency corporate loans decreased by 1.6% y/y to RON 107 bln.

However, when it comes to the stock of bank loans expressed in foreign currency (RON 120.4 bln or 32% of the total), this was driven up by the impressive 33.3% y/y surge in the stock of loans to companies (RON 97.0 bln at the end of June).

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