The annual growth rate to the month was half of what it was in May and is the slowest reported by lenders to Romania’s central bank since the beginning of the year.
Lending is already in negative territory compared with May, having dropped 0.1%.
The main factor in the significant June slowdown is the enforcement of the debt discharge law that stopped the growth of mortgage lending by limiting access to funding for many people. Bankers publicly admitted there is a freeze on the standard mortgage lending segment at the moment, with banks selling only a few loans a month.
“The impact of the debt discharge law is mainly felt as a slowdown of new loans. Considering the growth rate expected for new loans and the deals with non-performing loans planned for 2016, we believe the stock of loans should see a decline at the end of the year (compared with the same time of 2015),” said Mihai Patrulescu, chief economist of UniCredit Bank.
“The growth pace of the loan stock should return to positive territory in 2017.”
Non-governmental lending growth slowed down to 16% compared with more than 19% year-on-year in May. Total stock of leu-denominated loans reached RON118.9 billion (RON60 billion in retail loans and RON58.8 billion in corporate loans).
The slowdown affected both loans to consumers and companies. The stock of loans to consumers went up 30% in June 2016 compared with June 2015, while the growth in May 2016 to May 2016 stood at 33%. The growth in corporate loans in June reached 4.3%, three percent lower than the annual growth in May.
(English version by Loredana Fratila-Cristescu)