Tenth of Romanians hold more than half of total net wealth in the country, BNR report shows

About 10% of Romanians hold roughly 58% of the total net wealth in the country, according to a new report by the National Bank of Romania (BNR).

Overall, the net wealth of Romanians continued to grow and has reached approximately double the gross disposable income (Q4/2023). The net wealth of the population is calculated as the total value of non-financial and financial assets held by Romanians minus their debts.

“The balance sheet situation of the household sector remains robust, with a noticeable trend towards diversification of investment methods. The net wealth of the population represents approximately double the gross disposable income (Q4/2023), highlighting its importance for the economic resources of the population and for resilience during periods of stress. However, inequalities remain significant in terms of wealth, given that 10% of the population holds about 58% of the total net wealth," states the BNR in the latest edition of its Financial Stability Report, cited by Ziarul Financiar.

The financial wealth of the population grew at a sustained pace throughout the post-pandemic period, driven by accumulated investments in instruments such as pension funds (+31% in Q4/2023 vs. Q4/2022), securities (+40% in Q4/2023 vs. Q4/2022), and listed shares (+28% in Q4/2023).

The most significant portion of Romanians' financial asset portfolios continues to be occupied by liquid and less risky assets, namely cash and deposits, which stood at 35% in Q4/2023, though down from 43% five years ago. On the other hand, the share of household holdings in private pension funds is increasing, reaching 11% of total financial assets in Q4/2023 vs. 9% in Q4/2018, according to BNR data.

“Tezaur and Fidelis government bond issues have been successful among the population, with these programs encouraging the growth of government bond holdings through attractive returns. Consequently, the value of government bond instruments in the population’s investment portfolio has increased more than fourfold from 2018 to the present. The total amount of subscriptions in 2023 through the Tezaur program was 12.2 billion lei, with an average subscription value of 42,500 lei, while through the Fidelis program, government bonds totaling 9.4 billion lei were subscribed, with an average subscription value of 147,200 lei," the BNR report further states.

Compared to the situation in the euro area, one of the main differences is the higher share of insurance, pensions, and standardized guarantees in the euro area, according to central bank specialists.