Moldovan banks have sufficient resources to support expansion of lending activity, says analytical centre

Chisinau, 05 September /MOLDPRES/ – The banks continue to be profitable and sufficiently capitalised, while also having sufficient resources to support expansion of lending activity, mentions the Independent Analytical Centre (CAI) Expert – Grup within analysis on ranking of banking performance.

According to experts, in late July 2019 the main trends in financial system are characterised by the recent monetary policy interventions of the National Bank of Moldova (BNM) and inflationary expectations for upcoming period. Increasing the base rate by 0.5 percentage points for IInd consecutive month, up to 7.5 per cent, further reduces the investment appetite of economic agents and their intention to resort to bank loan. On the other hand, these actions do not affect individuals which remain interested in real estate and consumer loans.

The total volume of loans granted continues to increase despite tempering interventions pursued by BNM. In late July, the total balance of loans registered a value of almost MDL 38.9 bln, increasing by about 17 per cent compared to similar period of 2018. The increase of the credit stock is due to the natural persons who continue to take mortgages or for consumption in Moldovan lei (MDL). On the other hand, the lending of economic agents registers a tempering against the background of a weak investment appetite and tightening of loan conditions, both in MDL and in foreign currency (recently BNM has increased the norm of obligatory reserves to the means attracted in convertible currency from 14 to 17 per cent), also appreciate experts.

The quality of assets remains at a relatively low level due to increase of volume of new loans granted to individuals, which in fact prove to be the most responsible clients, notes CAI Expert – Grup. Non – performing loans rate around 10.9 per cent, with swings of 05 – 27 per cent depending on the bank. Also, the volume of own funds remains large enough to cover any unexpected shocks.

At both the aggregate and individual levels, the banking sector continues to accumulate profits. Thus, in Ist 07 months of 2019, banks accumulated a profit of MDL 1.39 bln, almost MDL 200 million more than in similar period of 2018.

Expert – Grup also has announced that in late July the banking performance ranking was led by banks of systemic importance for the national banking and financial system, namely: Moldova – Agroindbank (MAIB), followed by Moldindconbank, MobiasBanca and Victoriabank. These banks account for 87 per cent of profit accumulated at sector level and 79 per cent of total bank assets.