The interest margin on leu-denominated amounts – the spread between the interest rates charged on loans and those paid on deposits – climbed in January to 4.9%, 0.6% more than at the end of last year. The margin fluctuated significantly in the past year and a half, from 3.4% in December 2010 to 5.3% in February last year, show data from Romanian central bank BNR.
Banks raised their margins in the first month of the year after the average cost of leu-denominated loans granted to companies and to individuals climbed by 0.3% to 10.7% a year. Loans became more expensive solely due to the increase in the average interest rate on corporate loans, which neared 10% a year.
“It is not normal to see loans become more expensive during this period because the BNR interest rate has gone down, and inflation is very low. But because of smaller volumes of loans sold banks need higher margins to cover their costs. They don’t need a lot of money anymore and interest rates on deposits are rising at a lower rate,” comments financial analyst Dragos Cabat.
The rise of loan interest rates is entirely due to the higher margins charged by banks on top of their own financing costs, while the Robor indicator (the average interest rate at which local banks lend to each other), which is a price reference for leu-denominated loans, has visibly declined since the beginning of the year.
(English version by Daniela Stoican)