Corporate lending gained momentum thanks to the Covid support package over the past year, but as the subsidies are phased off and the economic activity returns to normal, the retail lending (consumer, mortgage) is gradually returning as the driving force behind the overall advance of the bank lending.

Thus, the corporate (local currency-denominated) loans maintain an annual growth rate of above 20% YoY (+22.1% YoY at end-August), significantly above the annual growth of the retail loans (+14.6% YoY).

Before the crisis, retail lending used to be by far the primary driver of bank lending.

Even now, as of August, the stock of retail loans (RON 132.0 bln) is 38% bigger than the stock of corporate loans (RON 88.9 bln).

But the market will sooner or later return to the pre-crisis pattern: corporate lending has advanced at comparatively slower rates in recent months - +0.8% MoM in August, compared to +1.6% MoM advance of the retail loans. This is not yet a trend since, until August, the corporate lending was still growing at stronger monthly rates.

But the retail lending is visibly gaining ground (from +9% YoY in January) and returns to annual growth rates closer to those demonstrated by the corporate lending that still benefits from Government support.

andrei@romania-insider.com

(Photo source: Kittichai Boonpong/Dreamstime.com)