The weak financial intermediation in Romania, which features the lowest loan-to-GDP ratio in Europe and among the lowest in the world when it comes to both household loans and corporate loans, has further eroded over the past year. The overall ratio reached 23.4% at the end of January, down from 23.8% one year earlier, according to data published by the National Bank of Romania (BNR) and the 2025 GDP estimate used by the Ministry of Finance.

The bank deposits-to-GDP ratio also deteriorated, to 34.8% at the end of January from 35.5% a year ago. 

The private sector’s balance with the banks remained high in the positive area (creditor position), with the deposits net of loans accounting for 11.4% of GDP at the end of January – out of which the households’ balance accounted for 10.7% of GDP. The corporate sector also maintains a net creditor position, although smaller (under 1% of GDP).

In absolute terms, the stock of loans in Romanian banks rose by 6.6% y/y to RON 446.4 billion (EUR 87.6 billion). The leu-denominated loans rose by 3.8% y/y to RON 303.5 billion, while the foreign currency-denominated loans rose by 13.2% y/y to RON 142.9 billion. 

Typically, the households relied on leu loans, while companies preferred foreign currency loans. By category of customer, the stock of retail loans increased faster than that of corporate loans (8.1% y/y versus 5.4% y/y).

The stock of bank deposits rose by 6.3% y/y to RON 664.1 billion (EUR 130.3 billion) at the end of January.

When it comes to deposits, the foreign currency deposits (some one-third of total) have increased faster: by 12.3% y/y to RON 211.0 billion at the end of January 2026, while the local currency deposits advanced by only 3.7% y/y to RON 453.0 billion. Building up the forex deposits was preferred by both retail and corporate segments. 

The local currency’s weakening, some 2.4% versus the euro, over the past year, has magnified the volume and growth rates for the stocks of both loans and deposits expressed in foreign currency. However, there was more than a simple exchange rate effect - the customers must have attempted to mitigate the exchange rate risk as well. 

Romania’s currency (leu) has been nominally stable over the past years until the May 2025 depreciation prompted by the political turmoil. As a result, it has strengthened significantly in real terms against the euro.

iulian@romania-insider.com

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