Romanians keep EUR 45 bln in their bank deposits

Romanians continue to increase their savings in bank deposits and prefer hard currency accounts, a prudent strategy that could be associated with lower confidence in the RON and worries regarding the economic situation.

Bank deposits in RON have become less attractive during the last couple of years as a consequence of low – and real negative – interest rates, currency depreciation and high inflation rate.

However, there are still few available options for keeping savings in Romania, experts warn.

According to fresh central bank report, RON-denominated deposits of residents (individual clients) rose by 0.3 percent month-on-month and by 8.8 percent year-on-year in September to RON 87.5 billion.

Forex-denominated deposits of households rose by 1.5 percent month-on-month and by 14.6 percent year-on-year in September to RON 118.8 billion-forex equivalent.

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The total bank deposits of Romanian households totaled EUR 44.7 billion in September 2019 – compared to EUR 23 billion in September 2009 or EUR 29 billion in September 2014.

In the same time, the bank deposits of the companies increased in RON but declined in hard currencies.

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 September, bank deposits of households and businesses totaled RON 346.1 billion (EUR 72.9 billion) and exceeded loans by 29.7 percent.

Almost 4 out of 10 Romanians (39 percent) have no savings and are forced to cut spending or borrow money from friends or family, a ING international study recently showed.

In Europe, more than one in four (27 percent) people say their household has no funds put aside. The shares are similar in Australia and the USA.

In the same time, bank loans in RON granted to individuals rose by 1.2 percent month-on-month and by 13.9 percent year-on-year in September, up to a fresh all-time high of RON 105.8 billion.

But companies decreased their borrowings in September as the RON corporate credit granted by local banks declined by 0.3 percent month-on-month to RON 71.9 billion.

Total bank loans – in RON and foreign currencies – granted to individuals and corporate clients in Romania rose by 0.8 percent month-on-month and by 7.7 percent year-on-year in September, to RON 266.8 billion.

During the last 12 months (September 2018-September 2019), forex-denominated loans rose by 3.9 percent, to RON 89 billion-forex equivalent.