The corporate loan stock reached 109 billion lei (almost EUR25 billion) in August, down from the end of last year and from August 2014.
Out of the 10,000 companies, which have a significant contribution to the country’s gross domestic product, about 3,450 had outstanding loans taken from banks worth RON8 billion (7.5% of the total volume of loans granted to non-financial corporations).
A stagnation of corporate lending is risky for the financial stability, Romania’s central bank says, as is the rise of the share of leu loans, but the risk is moderate.
The “Risk of further modest dynamics of loans to non-financial corporations, despite the sustainable growth potential” and the “Credit risk associated with the stock of loans, amid the widening share of domestic currency loans” were included by the central bank among moderate systemic risks.
Romania’s central bank published for the first time a map of risks to financial stability in its 2015 Financial Stability Report.
“Maintaining financial stability is not a fad because the market economy cannot work effectively, properly and will ultimately collapse unless financial stability is ensured,” Romanian central bank Governor Mugur Isarescu said.
Total lending barely managed to return to growth in August, which was the first positive trend since February 2013. The lending only rose by 0.2% compared with January-August 2014. The growth was because of the 27% rise in leu loans to an all-time high of RON105 billion. On the other hand, foreign currency loans fell 11% to RON108 billion.
Isarescu brought up the issue of the high number of companies constantly posting losses, warning that their situation affects even the lending process, as banks are unable to fund them because such companies are undercapitalized.
“Hoping to see capitalization done via banks would mean having banks decapitalize someone else, decapitalize themselves.”
(English version by Loredana Fratila-Cristescu)