Pension funds replace local banks among Romania’s main lenders

The stock of Government bonds and bills held by Romanian pension funds increased in the 12-month period to October 2022 with RON 12.5 bln (EUR 2.5 bln), compared to RON 4.5 bln increase in the local banks’ portfolio of Government papers, according to data from the Finance Ministry.

Thus, in net terms, the financing extended by the pension funds was nearly three times more consistent than that extended by the local banks – which are approaching the upper limitation regarding the share of state debt in their portfolios.

The largest single source of financing for Romania’s Government over the 12-month period was the Eurobond issues: RON 35.7 bln (EUR 7 bln).

Over the past five years to October 2022 (latest data available), the stock of Government papers held by the pension funds increased at an average annual rate of 22.3% – compared to 14.3% in the case of the local banks – and the pension funds now hold RON 61 bln (EUR 12 bln) of such instruments in their portfolios, nearly half the portfolio of such papers held by the local banks.

The value of the outstanding Eurobonds is RON 250 bln (EUR 50 bln), and it increased at an annual average rate of 21.6% over the past five years remaining the most dynamic option for the Romanian Government.

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