Banks in the past four months managed to find clients for new loans worth 12 billion lei (around EUR2.8 billion), with the overall private lending advance to RON216 billion (EUR51 billion) being supported by corporate demand for loans.
However, July saw a slowdown against June, with just a 1.5% increase in real terms, as this is a summer month, with a lot of holidays and lower economic activity.
Yet, total lending to companies reached RON113 billion (EUR26.7 billion) at the end of July, up 8.2% from a year ago, according to National Bank of Romania (BNR) data.
Individuals still prefer to borrow in foreign currency, with loans on this segment jumping by 4% from July 2010, to the equivalent of EUR15.8 billion. The monthly increase stood at 1.4%. In parallel, leu-denominated retail loans dropped by over 5% and hit RON35.4 billion, showing the promotions banks have launched for consumer loans since spring did not have the expected outcome.
“The economy is recovering at a slow pace and so regaining confidence is also a slow process. Under the circumstances, individuals believe it’s wiser to focus on savings, which explains the still low consumer penchant for spending,” comments Florian Libocor, chief-economist with BRD-Groupe Societe Generale.
Foreign currency lending to individuals was supported by the resumed “First Home” scheme and by the refinancing of leu-denominated consumer loans through foreign currency mortgages.
Loan sales started following an upward trend in April, with the funding advance driven by the foreign currency component. More than RON7 billion were added to the amount of loans contracted by companies over the past four months, BNR data shows.
(English version by Catalina Apostoiu; Editing by Loredana Fratila-Cristescu)