Most Moldovan banks focus their attention on individuals, say experts

Chisinau, 31 July /MOLDPRES/ – The improvement of financial and prudential indicators determines a change of business model for most banks, which focus their attention on the category of clients, individuals, which are the most responsible clients when it comes to payment, states an analysis of the Independent Analytical Centre (CAI) Expert – Grup on the situation within banking system in late June.

At the end of June, the total balance of loans reached a value of about MDL 38.8 billion, increasing by about 17 per cent compared to similar period of 2018. The growth of the stock of loans is mainly supported by individuals (increase of over 35 per cent), while the economic agents are still cautious regarding the investment process and bank financing (increase of only 09 per cent).

According to the author of the analysis, Dumitru Pintea, the main trends in the financial system are characterised by growth rates, whether these are financial indicators or reforms aimed at strengthening supervisory and regulatory mechanism. At both aggregate and individual levels, the banks continue to be profitable and well capitalised, while also having sufficient resources to support expansion of lending activity.

The level of own funds records adequate values, which maintains the solvency indicator at a higher level, with oscillations from one bank to another in the range 19 – 65 per cent, shows the analysis. However, the basic component of equity is represented by "accumulated reserves and profit carried over from previous periods, volume of which can be modified in case of dividends being granted to shareholders".

The expert appreciates that the liquidity indicators present a comfortable position in the short term and a less comfortable one in the long term. At the aggregate level, there is an excess of short – term resources, about 52 per cent of assets being liquid assets (State Securities, mandatory reserves, BNM certificates). On the other hand, large banks have a high level of short – term liquidity at the expense of long – term ones, while for small banks the situation is opposite.

The quality of assets continues to improve as the volume of non – performing loans is reduced and the volume of new loans has increased. The rate of non – performing loans has fallen to a level of around 10.6 per cent, with oscillations of 4.8 – 26 per cent depending on the bank. Also, the volume of own funds has remained large enough to cover any unexpected shocks.

The banking sector continues to accumulate profit. Thus, in the first 06 months of 2019, banks accumulated a profit of MDL 1.15 billion, almost 270 million more than in similar period of 2018.

Following the application of the banking performance ranking methodology, in late June 2019, in TOP 03, there are found banks of systemic significance, respectively: Moldova – Agroindbank, followed by Moldindconbank and MobiasBanca. The Ist 03 banks excel in terms of profitability and market indicators, returning about 74 per cent of accumulated profit at sector level and 63 per cent of total bank assets.