Expert-Grup analytical centre of Moldova says demand of new loans increases, amid decrease of interest rates

Chisinau, 12 January /MOLDPRES/ - The duty of banks’ intermediation records the first positive signals of increase, after three years of week developments. Against the background of decrease of the interest rates, the demand of new loans is increasing, both on behalf private persons and economic agents, the Expert-Grup Independent Analytical Centre has said in an analysis on the banking performance ranking.    

The financing of residents is growing amid the extension of the category of people benefiting from the First Home programme and increase in the demand of consumption loans. This fact prompts also an extension of the maturity of the total portfolio of loans, especially of those with a term of more than five years, at the expense of those up to one year, experts also said. Against the background of these developments, for the first time after the 2014/2015 banking crisis, the speed of providing new loans tends to be higher than of repaying earlier provided loans; this fact is also reflected in the dynamic of the stock of credits. Thus, in late last November, the stock of loans provided by commercial banks registered 35.4 billion lei.   

Data by the National Bank of Moldova (BNM) shows that the average rate of interest to the loans provided by banks in Moldovan lei decreased from 9.80 per cent annually in January 2018 to 8.45 per cent in November – the lowest level recorded in 2018. The average rate at financing for a term of more than five years  dropped even more – to 7.11 per cent and the sum of loans with the repayment term of more than five years increased by 80 per cent.  

According to BNM, the average rate of loans for real estate decreased from 7.53 percent annually in January to 6.34 per cent in November. At the same time, the sum provided by banks to residents to buy or build real estate on this period grew from almost 100 million lei to 234 million lei.

„Citizens increased their interest in mortgage credits – we have lower interests, state’s support programmes, etc. Most mortgage loans are due, besides other factors, also to the implementation of the First Home programme with social benefits, which sees possibility for Moldova’s citizens with ages from 18 to 45 years to get loans for buying their own dwellings,” BNM Governor Octavian Armasu said in an interview for the media. Armasu noted that, at the situation from 30 November 2018, the loans provided for purchasing/construction of real estate had amounted to 3.8 billion lei or 10.7 per cent of the portfolio of credits on the sector.    

At the same time, the BNM governor said that “the quick increase is also due to the low basis. In the almost comparable countries, the level of mortgage loans is much higher: in Lithuania, the mortgage loans account for 37 per cent of the portfolio and in Georgia – 56 per cent.

According to Expert-Grup, the banking performance ranking continues to be led by banks of systemic importance for the national banking and financial system, respectively Moldova-Agroindbank, MobiasBanca and Moldindconbank. Preponderantly, they excel in terms of profitability and market indexes; they have about 82 per cent of the profit got by the sector and 61 per cent of all bank assets.