The National Bank of Romania has published at the end of February the Bank Lending Survey. The survey is conducted on a quarterly basis by the NBR in January, April, July and October.
As shown in the survey, during the final quarter of 2018, credit institutions left unchanged their credit standards on loans to households for house and land purchase, while tightening moderately those for consumer credit. As for loans to non-financial corporations, credit standards saw a marginal tightening.
For the first quarter of 2019, banks envisage credit standards to tighten significantly for both housing loans and consumer credit to households. Similarly, a significant tightening of credit standards is expected for corporate loans to non-financial corporations in the next quarter.
In 2018 Q4, demand for both major types of loans to households dropped markedly. In the case of loans to non-financial corporations, demand went up marginally at aggregate level. The breakdown shows that demand from large companies increased moderately on short and long term. As for the loans to small- and medium sized enterprises, demand targeted rather short-term financing, which stood substantially higher.
For the period ahead (2019 Q1), banks foresee a significant decline in demand for both types of loans to households. Loan demand from non-financial corporations is expected to post mixed developments: a moderate rise in the case of short-term loans and a steady evolution for medium- and long-term loans.
In terms of non-financial corporations, credit standards tightened marginally in the last quarter of 2018 against the previous quarter. For the first three months of 2019, banks anticipate credit standards to tighten significantly for all types of companies, for both long- and short-term loans.
Credit terms and conditions were eased in 2018 Q4, especially as regards the spread between the average lending rate and 1M ROBOR, which narrowed.
Loan demand from companies experienced a marginal positive impulse at aggregate level. The breakdown shows that demand from large companies increased moderately, while in the case of small- and medium sized enterprises, demand for short-term financing expanded significantly and demand for long-term financing increased marginally. The loan rejection rate remained flat in this quarter as well.
According to same source, credit risks by business sector recorded fluctuations in 2018 Q4, increasing notably in energy, construction and real estate. For the companies operating in agriculture, risk rose moderately, similarly to the picture seen in the prior three-month period. In terms of company size, banks assessed the risk for micro-enterprises and small-sized companies as growing moderately, whereas for large companies the risk is perceived to be on the wane.
In terms of households, in 2018 Q4, local credit institutions left unchanged their credit standards on loans for house and land purchase, but tightened moderately those for consumer credit. For 2019 Q1, banks envisage credit standards to tighten significantly for both housing loans and consumer credit.
Credit terms and conditions eased marginally in respect of the spread between the average lending rate and 1M ROBOR for housing loans, while for consumer credit they held steady in 2018 Q4 versus 2018 Q3.
As shown in the survey, loan demand declined considerably in 2018 Q4 for both housing loans and consumer credit. For the next three months, banks anticipate demand for both types of loans to households to continue to recede. At the same time, in 2018 Q4, the number of loan applications rejected by banks saw mixed developments by type of loan: it declined marginally for the loans to households for house and land purchase, but stepped up markedly for consumer credit.
For further information: National Bank of Romania- Bank Lending Survey February 2019