The loan to deposit ratio, which stood at 102% in March, has fallen by almost 20 percentage points in the last eighteen months.
At the end of 2008, when credit lines from parent banks fuelled lending, the ratio had come close to 140%, according to Romania’s central bank data.
The drastic adjustment of the ratio reflects the deleveraging process of the major European banks operating in Romania, which left their local subsidiaries without significant resources, forcing them to be more competitive in raising more cash from customers. The major European bank groups have reduced their Romanian exposure by 20% over the past five years.
The volume of loans banks had granted to companies and consumers by late March 2014 stood at almost 218 billion lei (EUR49 billion), while deposits amounted to RON214 billion. Deposits rose by 7% in nominal terms, while loans declined by almost 3%. Bankers raised about RON8 billion in deposits from individual customers alone every year during the crisis. (EUR1=RON4.4340)
(English version by Loredana Fratila-Cristescu)