The stock of non-government loans in
The loans to the government edged up marginally by 0.1% y/y [contracting by 2.5% y/y in euro] to RON 9.9bn.
Local currency lending substitutes the forex loans, which still dominate the country's banking system. The loans expressed in the local leu currency, 34% of total for households and 44% of total for non-financial companies, increased by 1.2% y/y for both the residential and corporate market segments. The shift from foreign to local currency lending is driven by the central bank cutting the policy interest rates – but also by the government extending state guarantees for only local currency mortgage loans. Such household mortgage loans were 18.8% of total non-government loans at the end of January, expanding by 11.5% y/y.
The loan to deposit ratio edged up marginally to 102% at the end of January from 101% at the end of 2013. For the whole banking system, government loans and deposits included, the ratio dropped to 87% from 91% at the end of 2013 as the government made more bank deposits during January amid securities issues at home and abroad.
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