Romania’s economic activity is concentrated in the capital Bucharest and eight counties (Ilfov, Cluj, Timiș, Brașov, Bihor, Constanța, Iași and Prahova), local financial publication Bankingnews.ro concluded after analyzing the distribution of the branches of the eight biggest banks on the local market.

Each of the eight counties has over 100 bank branches while Bucharest has over 500. Another 11 counties (Alba, Arad, Argeș, Bacău, Dolj, Galați, Hunedoara, Maramureș, Mureș, Sibiu și Suceava) perform decently, with between 70 and 100 bank branches.

The remaining 22 counties, covering about half of the country’s territory, are “struggling in powerlessness and administrative negligence,” according to bankingnews.ro.

This is particularly visible in Botoșani, Calarasi, Caraș-Severin, Covasna, Giurgiu, Ialomița, Mehedinți, Teleorman, Tulcea and Vaslui, which have fewer than 40 bank branches each.

Under a more quantitative approach, data from the National Bank of Romania somehow confirm the conclusions issued by Bankingnews.ro, which uses the number of bank branches as a proxi for the economic activity.

At the end of October 2019, one third of the bank loans and nearly half of the bank deposits were concentrated in Bucharest and neighboring Ilvov area. Officially, Bucharest and Ilfov area host 2.5 million people, just over 10% of the country’s total population, but the actual number could be over 4 million, according to the local authorities.

The best metrics to evaluate the discrepancy between the regional economic activity is provided by the ratio between the bank loans in the richest decile and the poorest decile respectively of Romania’s counties (Bucharest and Ilfov not included), which is 10.5, meaning that the bank loans in the four “richest” counties (by volume of bank loans) were ten times larger than the bank loans in the “poorest” four counties.

The same ratio calculated for the volume of deposits - which is an even better proxi for the “wealth” of a county (as opposed to loans reflecting economic activity), is 8.6.

Notably, while the “richest” counties in terms of loans and deposits are the same, the “poor” counties are different when they are defined in terms of loans or deposits (meaning that economic activity not necessarily generate wealth in some counties).

(Photo: Pixabay)

editor@romania-insider.com