In the last 16 years, the value of the share capital of crediting institutions has increased 10 times, according to the data published by the First Deputy Governor of the National Bank of Romania (BNR) Florin Georgescu, in the presentation ‘Banking Capital in Romania – Between Development Factor and Source of Imbalance’ published on the central bank’s website, capital.ro informs.
Starting in 2000 and up to Q3 2016, the share capital of credit institutions in Romania has increased 10 times, from EUR 580 million to EUR 5.8 billion. The increase is mainly due to the increase of foreign capital from EUR 300 million in 2000 to EUR 5 billion in the third quarter of 2016 (16-fold increase). The data were published by the BNR First Deputy Governor, Florin Georgescu at the end of March.
According to the BNR official, the Romanian investments in the banking system have increased only 2.6 times during the same period, from EUR 270 million in 2000 to EUR 820 million in 2016.
In 2000, the share of domestic capital in total share capital of the banks was of 46%. In the first nine months of 2016, it dropped to 14%, while the share of foreign capital rose from 54% in 2000 to 86% in Q3 2016.
As far as bank assets are concerned, they are held, since 2007, overwhelmingly, in a share of about 90% by banks with foreign capital. “In the last four years, while the aggregate assets of foreign-owned banks have rebounded on an upward trend, the aggregate assets of banks with domestic capital remained relatively constant at the level of EUR 8 billion (10% of the total).
The BNR official draws attention to the fact that the banks’ external debts totalled EUR 26 billion in 2008, up 13 times (plus EUR 14 billion) as compared to 2003. “Following the Vienna Agreement (2009-2011), the foreign resources halved to EUR 11 billion (the level in 2006) in December 2016,” Florin Georgescu said.
The consequence of the foreign capital’s withdrawal was a positive one for the Romanian economy in terms of savings. “The withdrawal of foreign resources from banks after 2008 was offset by the substantial increase in domestic savings, which reached EUR 61 billion, up by 60% (+EUR 23 billion) in December 2016 against the end of 2008,” Georgescu said.
The BNR First Deputy Governor explained that the volume of credits to the population increased 13.5 times during 2003-2008 (from EUR 2 billion in 2003 to EUR 26.9 billion in 2008). Corporate loans rose 4.6 times (from EUR 5.6 billion in 2003 to EUR 25.7 billion in 2008). However, after 2012, loans to the population increased by 8% (+EUR 1.8 billion), as loans to companies fell by 15% (-EUR 4.1 billion).