Romanian households and businesses increased their creditor status against banks last year

Romanian households and businesses have increased their savings at higher pace than borrowing last year and strengthened their creditor status against the local banks, central bank data show.

Last year, bank deposits of Romanian households and companies rose by 9 percent (December 2018/December 2017), while bank loans increased by only 7.9 percent.

During the last couple of years, Romania’s bank clients increased their creditor status against banks due to strong savings and weak credit market, deposit holders being technically the banks’ creditors.

In December 2018, bank deposits exceeded loans by 31 percent, as credit market is still affected by low demand, experts say.

Bank loans in RON granted to individuals rose by 0.6 percent month-on-month and by 19.3 percent year-on-year in December, up to a fresh all-time high of RON 95.7 billion (EUR 20.6 billion) despite higher interest rates.

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Bank loans granted to individuals and corporate clients in Romania rose 7.9 percent year-on-year in December, to RON 251.05 billion (EUR 54 billion), while the amount of deposits increased by 9 percent, to RON 329.7 billion (EUR 70.9 billion).

RON-denominated non-government loans, which include loans granted to individual clients and companies, grew by 13.4 percent year-on-year in December to RON 165.6 billion.

During the same period, forex-denominated loans declined by 1.3 percent, to RON 85.4 billion-forex equivalent, due to stricter rules regarding forex bank loans.

Bank deposits have become less attractive this year as a consequence of low interest rates and rising inflation.

RON-denominated deposits of residents (individual clients and companies) rose by 6.8 percent year-on-year to RON 220.4 billion, central bank data show.

Forex-denominated deposits rose by 13.6 percent year-on-year in December to RON 109.3 billion-forex equivalent.