Bank lending, still tight. Total loans decreased by 3 pct in 2014

Lending activity in Romania continues to be slow, as banks seems to remain prudent and very cautious when it comes to releasing new loans, given the latest data provided by the National Bank of Romania (BNR) which indicates that non-governmental loans decreased by 3.1 percent year-on-year in 2014 to 211.6 billion lei.

Although the increase in RON-denominated loans which went up 8.5 percent, driven by a 17.4 percent hike in household loans, may indicate a relaxation in terms of lending, in fact it reveals a higher refinancing activity as foreign currency-denominated loans expressed in RON fell by 10.6 percent.

RON-denominated loans for households amounted to 40.6 billion lei, while corporate loans came to nearly 52 billion lei, after an advance by 2.4 percent compared to 2013. It was, however cancelled by the sharp decrease in Forex-denominated loans which dropped by 11.8 percent (corporate) and by 9.5 percent (household), respectively.

On the other hand, deposits increased by 7.5 percent over the previous year, adding up to 231.8 billion lei. Household deposits in domestic currency rose by 7.6 percent against end-December 2013, while corporate deposits rose by 10.9 percent y-o-y.

Forex-denominated deposits of resident households and corporates expressed in RON advanced 4.6 percent: household forex deposits grew by 4.5 percent when expressed in domestic currency and forex deposits of companies rose by 4.8 percent when expressed in RON, shows the BNR report.