Romania: Lending maintains good momentum in July

Compared to the same month last year, retail loans grew 11.4% in July-18, slightly below the 11.6% in June-18 but still marking the fifth consecutive month of double-digit growth. Consumer loans in local currency have maintained a strong momentum, accelerating to 15.7%YoY growth, while RON mortgages posted the first slowdown this year, at 3.4%YoY from 3.9% in June-18.

Despite a flat RON lending component which maintained the 7.9%YoY growth, total corporate loans still shyly accelerated from 3.0%YoY in June-18 to 3.3% in July-18 following a more pronounced moderation of the contraction in FX lending. On a month-on-month basis, the FX loans accelerated to 0.4% in July-18 after a contraction of -1.2%MoM in June. Loans with maturity above five years also posted a modest acceleration from 3.7% to 3.9%YoY due exclusively to FX lending.

Data shows that central bank (NBR) tightening hasn’t yet had much effect in slowing down lending. Consumer loans, in particular, have been marching ahead led by double-digits wage growth and deeply negative real interest rates. Nevertheless, the macro-prudential measures that governor Mugur Isarescu announced for September at the latest will probably be a lot more effective in slowing down lending, consumer loans in particular.