Banks' margins continue to fall

The lending profit margin – the spread between the interest rate asked by banks for loans and that offered for savings, narrowed to an average of 3.05% in August, according to data from the NBR (National Bank of Romania). At the beginning of the year, the RON interest rate was 2.5% higher than in August, while for euros, the interest rate was almost half a percentage point higher for individual clients. “Banks stand to lose as a result of a continuous increase in interest rates for deposits, with a view to attracting liquidity, while interest rates for loans could not be raised at the same extent due to pressure from competition,” said Jean Pierre Vigroux, Managing Partner of consulting company Mazars, whose portfolio of clients also includes banks. The annual interest rate for deposits in RON set up by the population climbed to 10.67% in August, which means an over 4% increase within a year.