The National Bank of Romania has published the Bank Lending Survey – August 2019. The Survey is conducted on a quarterly basis by the NBR in January, April, July and October. It is based on a questionnaire (released as part of the May 2008 analysis) which is sent to the top 10 banks. These banks were selected based on their market share in terms of loans to companies and households, accounting for approximately 80 percent of the loan stock.
According to the Survey, credit standards on loans to households, i.e. consumer credit and loans for house and land purchase, remained unchanged in 2019 Q2. Similarly, as far as non-financial corporations were concerned, credit standards held steady.
Banks foresee that lending conditions will be left unchanged over the next quarter (2019 Q3) for both types of loans to households. As for non-financial corporations, banks anticipate a moderate tightening of credit standards, regardless of the company size.
Households’ demand for loans for house and land purchase dropped moderately, whereas that for consumer credit rose significantly. Non-financial corporations’ loan demand stepped up markedly at aggregate level, particularly due to small- and medium-sized enterprises. Looking at large companies, demand for short-term loans contracted marginally, while that for long-term loans edged mildly higher.
For the period ahead (2019 Q3), credit institutions envisage household demand for housing loans to stay put and that for consumer credit to rise moderately. Turning to non-financial corporations, banks anticipate a marginal advance for both long- and short-term loans over the next three-month period.
In terms of non-financial corporations, credit standards did not undergo changes in 2019 Q2, the same as in the previous quarter. Expectations for the period ahead point to a moderate tightening of these standards, especially in the case of loans to small- and medium-sized enterprises.
Credit terms and conditions changed somewhat in 2019 Q2, as the premium demanded for riskier loans saw a moderate tightening that was partly offset by a marginal easing of non-interest rate charges. The other terms and conditions remained unchanged.
Loan demand from companies experienced a significant rise at aggregate level. By company size, demand from small- and medium-sized enterprises increased (significantly for long-term loans and moderately for short-term loans), whereas demand from large companies shrank marginally. The loan rejection rate, increased insignificantly, on account of large companies applying for short-term financing.
Credit risks of companies assessed by credit institutions in terms of their size experienced a moderate worsening in the case of large companies and medium-sized enterprises. By business sector, credit risk associated with firms reveals mixed developments, as reported by banks for 2019 Q2. While for the energy and transport companies risk increased markedly, for those operating in agriculture and industry it was assessed as being on the wane.
For further information: NBR – Bank Lending Survey – August 2019