Isarescu: banking system faring better

The current situation of the banking system is much healthier as compared to the past years and the most relevant indicators for this situation are non-government credit, the average creditworthiness rate in the system, as well as the share of pending receivables in the total of receivables, National Bank of Romania (NBR) Governor Mugur Isarescu told the banking forum organised by “Piata Financiara Conferences.”

“The creditworthiness rate in the banking system stood at 28.6%, against a minimum level of 12%, while pending receivables in the banks’ account books decreased from one month to another, going down to almost zero,” Isarescu said.

On the other hand, non-government credit registered a significant increase, especially for the private sector. Credits granted to the private sector amounted to some 50,000 billion ROL in September 2001, with 40,000 billion ROL aiming at services and industry, which is close to EU requirements.

“The increase in non-government credit will amount to 20% in real terms by the yearend. This figure took us by surprise. At the beginning of the year, we did not expect this evolution. Considering these figures, we may say that the banking sector brings an important contribution to the Romanian economy growth,” the NBR Governor said.

According to the stand-by agreement concluded with the IMF, non-government credit is set to increase by 5-6% in 2002. “Nobody will be annoyed by a higher increase provided it does not prompt inflationary effects. Commercial banks should take their time and be cautious with loaning,” Isarescu said.

The NBR Governor specified that overall domestic credit decreased in real terms, mainly because the Government has borrowed less from the Romanian economy lately, has curbed the commercial deficit and re-entered international markets.