Bankers' optimism fails to revive loan demand

February came with another unpleasant surprise, with private lending continuing to decline, showing that bankers are still unable to sell enough loans to cover repayments, despite many players announcing growth plans for this year.

Private lending fell by 0.6% in February, to a volume of 206.6 billion lei (49 billion euros). Excluding the impact of inflation, the decline was even greater, of 1.3%. This was the second consecutive month of decline, after the stock of funding had managed to rise at the end of last year. Under the circumstances, private lending manages to see a modest annual growth, of 3.7% in nominal terms, which, however, turns into an annual decline of 3.6% after eliminating the impact of inflation.

“The annualised trend confirms what we have seen so far. Corporate funding is on the rise, especially foreign-currency funding. On the individual loans segment the increase largely came from foreign currency loans, and it was exclusively the result of the ‘First Home’ scheme,” says Ionuț Dumitru, chief economist of Raiffeisen Bank.