Transcript CristianPopapresentation

NATIONAL BANK OF ROMANIA
1
Summary (I)
•
•
•
•
•
Romania registered rapid average growth from 2004-8, fueled by strong capital
inflows, including lending expansion (led by fx) mainly financed by parent bank credit
lines
This took place at the expense of overheating: both inflation and CAD were
worsening
Strong short-term nominal appreciation also created a challenge for macroeconomic
demand management, through the stimulative effects of interest rate hikes, mirrored
in balance sheet and wealth effects (esp. for unhedged borrowers)
The NBR took a broad variety of measures to slow down unsustainably rapid fx (and
overall) credit growth: increases in MRR (higher for fx liabilities), LTV, debt service to
income limits for households (across spectrum of financial institutions), exposure
limits for banks to unhedged borrowers, tougher stress-test coefficients for fx
exposures (esp. ‘exotic’ denominations), demands for higher capital base, moral
suasion
The flexible inflation targeting regime was interpreted to warrant preventing
additional nominal appreciation of the domestic currency, since the disorderly
reversal of such appreciation (not warranted by improving fundamentals) would not
only lead to inflationary consequences, but also pose challenges to financial stability:
sustainably achieving inflation targets over a medium-term perspective while
adjusting (or not worsening) macroeconomic disequilibria was the stated goal of
monetary policy; however, this lacked support from a procyclical stance of fiscal and
incomes policies
NATIONAL BANK OF ROMANIA
2
Summary (II)
•
•
•
•
•
•
•
After Oct. 2008, Romania entered into a prolonged recession, on the background not
of a fully-fledged sudden stop, but of a sizable reduction in capital flows, with
significantly more difficult and expensive access to financing against growing risk
aversion of investors everywhere; subsequent correction in both external & (with a
lag) fiscal deficits
Banks turned from ST competition for market shares to procyclical deleveraging –
competing for scarce domestic savings bid up deposit yields and, with widening
margins (from NPL growth & provisioning requirements), lending rates also rose
considerably
However, efforts to consolidate & increase bank capital started ahead of the crisis,
with comfortable levels even against rising NPLs (solvency rate currently at 14.7% in
Dec. 2010 against 12.8% in Sept. 2008)
Conclusions:
Need to manage fx credit growth issue pro-actively & comprehensively, by involving
parent banks and cooperation between regulators/supervisors from both home & host
countries: debtor-focused measures adopted solely in host country have limited
effectiveness, become porous over 1-2 years and may have distortive side effects
(cross-border credit transfer, etc.)
Liquidity becomes not only an important issue for financial system, but also a quasiinstrument of monetary policy
Longer-term, ‘holistic’ view of economic developments, integrating price stability and
financial stability are key challenges for central banks
NATIONAL BANK OF ROMANIA
3
Real GDP
annual percentage change
8.5
5.7
7.9
7.3
6.3
5.1
5.2
4.2
2.4
-2.0
-7.1
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010*
* NBR estimate
2010 Q3/2009 Q3: -2.5%; 2010 Jan.-Sep./2009 Jan.-Sep: -1.9%
Source: National Institute of Statistics
NATIONAL BANK OF ROMANIA
4
Domestic Demand and Current Account Deficit
16
% of GDP, rolling basis
real annual percentage change
CAD (rhs)
12
12
domestic demand
8
16
8
GDP
III
II
I/10
IV
III
II
I/09
IV
III
II
I/08
IV
III
II
I/07
IV
-16
III
-16
II
-12
I/06
-12
IV
-8
III
-8
II
-4
I/05
-4
IV
0
III
0
II
4
I/04
4
Source: National Institute of Statistics, National Bank of Romania
NATIONAL BANK OF ROMANIA
5
Current Account Balance
percent of GDP
-3.3
-3.7
-5.5
-4.2
-4.5
2009*
2010e*
-5.8
-8.4
-8.6
-10.4
-11.6
-13.4
2000
2001
2002
2003*
2004*
2005*
2006*
2007*
2008*
e) NBR estimate
*) including reinvested earnings
Jan.-Nov. 2010: EUR -5.2 bn., up 23.5% yoy
Source: National Bank of Romania, National Institute of Statistics, National Commission of Prognosis
NATIONAL BANK OF ROMANIA
6
Trade Balance
(monthly data)
6
5
index, as against the same period of previous year
EUR bn.
250
trade balance
exports fob
imports fob
exports fob
imports fob
trade balance
4
200
3
150
2
1
100
0
-1
50
Jan.04
May.04
Sep.04
Jan.05
May.05
Sep.05
Jan.06
May.06
Sep.06
Jan.07
May.07
Sep.07
Jan.08
May.08
Sep.08
Jan.09
May.09
Sep.09
Jan.10
May.10
Sep.10
-3
Jan.04
May.04
Sep.04
Jan.05
May.05
Sep.05
Jan.06
May.06
Sep.06
Jan.07
May.07
Sep.07
Jan.08
May.08
Sep.08
Jan.09
May.09
Sep.09
Jan.10
May.10
Sep.10
-2
0
In 2010, yoy growth of exports and imports was 28.1% and 19.9% respectively.
Source: National Institute of Statistics
NATIONAL BANK OF ROMANIA
7
Current Account Deficit Financing via FDI
15
EUR bn.
EUR bn.
5
10
0.6
0.4
3
0.7
5
0.5
0.6
5.1
5.2
8.7
7.0
9.3
0.5
0.3
3.1
2.1
3.6
1
0
-5.1
-4.9
-6.9
-5
–1
-10.2
-16.7
-16.2
-4.2
-10
-5.2
–3
-15
capital transfers
-20
capital transfers
foreign direct investment
foreign direct investment
current account balance
current account balance
–5
–7
-25
2004
2005
2006
2007
2008
2009
In 2009, net FDI decreased 61.9% yoy, but, together with capital
transfers, covered 82.7% of current account financing.
Jan.-Nov. 2009
Jan.-Nov. 2010
Current account financing via FDI (including capital transfers)
amounted to 46.2% in Jan.-Nov. 2010 vs 83.0% in Jan.-Nov. 2009.
In Jan.-Nov. 2010, net FDI decreased 31.3% yoy.
Source: National Bank of Romania, National Institute of Statistics
NATIONAL BANK OF ROMANIA
8
Inflation Rate
50
percent
45.7
45
target (Dec./Dec.)
40.7
40
actual (12-month average)
35
34.5
30
30.3
actual (Dec./Dec.)
25
22.5
20
17.8
15
15.3
14.1
11.9
10
9.3
9.0
8.6
5
0
27
25
22
14
9
7.5
±1pp
6.6
7.8
4.87
6.57
4.8
6.30
5
±1pp
4
±1pp
3.8
±1pp
5.6
7.96
4.74
6.1
3.5
±1pp
3.5
±1pp
3.0
±1pp
3.0
±1pp
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: National Institute of Statistics, National Bank of Romania
NATIONAL BANK OF ROMANIA
9
Inflation Rate
16
annual percentage change
14
12
10
8
Target 2011
3.0
6
4
Target 2005
7.5
Target 2006
Target 2007
5.0
4.0
2
0
Dec.03
Dec.04
Dec.05
Dec.06
Target 2008 Target 2009 Target 2010
3.5
3.8
3.5
Dec.07
Dec.08
Dec.09
Dec.10
Target 2012
3.0
Dec.11
Dec.12
Note: ±1 percentage point around the central target
Source: National Institute of Statistics, National Bank of Romania
NATIONAL BANK OF ROMANIA
10
Headline Inflation and CORE Inflation
annual percentage change
CPI (total)
CORE1 (CPI – administered prices)
CORE2 (CORE1 – volatile prices*)
Sep.10
Dec.10
Mar.10
Jun.10
Sep.09
Dec.09
Mar.09
Jun.09
Sep.08
Dec.08
Mar.08
Jun.08
Sep.07
Dec.07
Mar.07
Jun.07
Sep.06
Dec.06
Mar.06
Jun.06
Sep.05
Dec.05
Mar.05
Jun.05
Sep.04
Dec.04
Mar.04
Jun.04
adjusted CORE2**
Dec.03
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
*) items with volatile prices: vegetables, fruit, eggs, fuels
**) excluding tobacco and alcoholic beverages
Source: National Institute of Statistics, National Bank of Romania calculations
NATIONAL BANK OF ROMANIA
11
Inflation Rate
16
contribution to annual inflation rate; percentage points
14
adjusted CORE2
administered prices
12
volatile prices
tobacco and alcohol
10
8
6
4
2
0
Dec.10
Jun.10
Sep.10
Mar.10
Dec.09
Sep.09
Jun.09
Mar.09
Dec.08
Jun.08
Sep.08
Mar.08
Dec.07
Sep.07
Jun.07
Mar.07
Dec.06
Sep.06
Mar.06
Jun.06
Dec.05
Sep.05
Jun.05
Mar.05
Dec.04
Sep.04
Mar.04
Jun.04
Dec.03
-2
Source: National Institute of Statistics, National Bank of Romania calculations
NATIONAL BANK OF ROMANIA
12
Tradables and Non-tradables* Prices
30
annual percentage change
tradables (goods)
25
non-tradables (mainly services and goods with administered prices)
20
15
10
5
Dec.10
Aug.10
Apr.10
Dec.09
Aug.09
Apr.09
Dec.08
Aug.08
Apr.08
Dec.07
Aug.07
Apr.07
Dec.06
Aug.06
Apr.06
Dec.05
Aug.05
Apr.05
Dec.04
Aug.04
Apr.04
Dec.03
0
*) based on COICOP
Source: Eurostat; National Bank of Romania calculations
NATIONAL BANK OF ROMANIA
13
Inflation Forecast
10
annual percentage change
annual percentage change
Inflation targets
(Dec./Dec.)
2010: 3.5%
2011: 3.0%
2012: 3.0%
9
8
7
6
10
uncertainty interval
9
4-quarter inflation rate (eop)
8
variation band*
7
target
6
5
5
4
4
3
3
2
2
1
1
0
0
IV
I
2010
II
III
IV
I
2011
II
III
IV
I
2012
II
III
IV
*) ±1 percentage point around the central target
Note: according to the February 2011 Inflation Report
Source: National Institute of Statistics, NBR calculations
NATIONAL BANK OF ROMANIA
14
Inflation Rate and Interest Rates
32
percent
percent
32
24
24
20
20
16
16
12
12
8
8
4
4
0
0
Jan.04
Jul.04
Jan.05
Jul.05
Jan.06
Jul.06
Jan.07
Jul.07
Jan.08
Jul.08
Jan.09
Jul.09
Jan.10
Jul.10
28
Jan.04
Jul.04
Jan.05
Jul.05
Jan.06
Jul.06
Jan.07
Jul.07
Jan.08
Jul.08
Jan.09
Jul.09
Jan.10
Jul.10
28
inflation rate (percentage change against
the same year-earlier period)
inflation rate (percentage change against
the same year-earlier period)
interest rate on monetary policy operations
(stock; % p.a.)
average interest rate on lei-denominated loans
to non-financial corporations and households (% p.a.)
NBR policy rate (% p.a.)
average interest rate on lei-denominated time deposits
from non-financial corporations and households (% p.a.)
NBR policy rate: 6.25% starting with May 5, 2010
Source: National Bank of Romania, National Institute of Statistics
NATIONAL BANK OF ROMANIA
15
Interest Rates in the Banking System
percent per annum
percent per annum
32
28
28
24
24
20
20
16
16
12
12
8
8
4
4
0
0
Jan.04
Apr.04
Jul.04
Oct.04
Jan.05
Apr.05
Jul.05
Oct.05
Jan.06
Apr.06
Jul.06
Oct.06
Jan.07
Apr.07
Jul.07
Oct.07
Jan.08
Apr.08
Jul.08
Oct.08
Jan.09
Apr.09
Jul.09
Oct.09
Jan.10
Apr.10
Jul.10
Oct.10
32
NBR policy rate (% p.a.)
new lei-denominated loans to non-financial corporations and households
new lei-denominated time deposits from non-financial corporations and households
interest rate on monetary policy operations (flow)
Note: Starting June 2010, monetary indicators are calculated based on NBR Norms No. 11/2009;
data series for previous period are restated in order to ensure comparability.
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
16
Jan.02
Apr.02
Jul.02
Oct.02
Jan.03
Apr.03
Jul.03
Oct.03
Jan.04
Apr.04
Jul.04
Oct.04
Jan.05
Apr.05
Jul.05
Oct.05
Jan.06
Apr.06
Jul.06
Oct.06
Jan.07
Apr.07
Jul.07
Oct.07
Jan.08
Apr.08
Jul.08
Oct.08
Jan.09
Apr.09
Jul.09
Oct.09
Jan.10
Apr.10
Jul.10
Oct.10
Jan.11
Nominal Exchange Rate
2.7
3.1
3.3
RON/EUR
(daily data)
2.9
NBR's decision to pursue
a more flexible exchange rate
3.5
3.7
3.9
4.1
4.3
4.5
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
17
Real Exchange Rate of the RON against the EUR
260
240
index, 2000 = 100, monthly averages
based on CPI differential between Romania and Euro area
based on PPI differential between Romania and Euro area
220
based on ULC in industry
200
180
160
140
120
100
Jan.01
Apr.01
Jul.01
Oct.01
Jan.02
Apr.02
Jul.02
Oct.02
Jan.03
Apr.03
Jul.03
Oct.03
Jan.04
Apr.04
Jul.04
Oct.04
Jan.05
Apr.05
Jul.05
Oct.05
Jan.06
Apr.06
Jul.06
Oct.06
Jan.07
Apr.07
Jul.07
Oct.07
Jan.08
Apr.08
Jul.08
Oct.08
Jan.09
Apr.09
Jul.09
Oct.09
Jan.10
Apr.10
Jul.10
Oct.10
80
Note: For PPI and ULC, data recalculated according to NACE Rev.2 and to the change in the base year (2005 instead of 2000)
and weighting system.
Source: National Bank of Romania calculations, National Institute of Statistics, IMF - International Financial Statistics
NATIONAL BANK OF ROMANIA
18
Labour Cost Adjustment in Manufacturing
140
annual index (%)
130
120
110
100
90
Oct.10
Apr.10
Jul.10
Oct.09
Jan.10
Apr.09
Jul.09
Oct.08
Jan.09
Jul.08
Jan.08
Apr.08
Jul.07
Oct.07
Jan.07
Apr.07
Jul.06
Oct.06
Apr.06
Oct.05
Jan.06
Apr.05
Jul.05
Apr.04
Jul.04
Jan.04
70
Oct.04
Jan.05
gross nominal wage in manufacturing
productivity in manufacturing
unit labour cost
80
Source: National Institute of Statistics, NBR calculations
NATIONAL BANK OF ROMANIA
19
Foreign Reserve Assets
Romania's International Reserves
EUR billion
40
40
NBR foreign exchange reserves
36
banks' foreign exchange reserves
32
NBR foreign exchange reserves
36
gold
32
gold
28
28
2010
Jan. 2011
2009
2008
2007
2006
0
2005
0
2004
4
2003
4
2002
8
Nov.2010
8
2009
12
2008
12
2007
16
2006
16
2005
20
2004
20
2003
24
2002
24
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
20
Reserves and Debt Indicators
16
percent
months
percent
500
1,000
fx off. reserves/ST ext. debt (resid. maturity)
fx off. reserves - months of imports*
450
14
off. reserves - months of imports*
400
private debt - months of exports*
350
fx off. reserves/[ST ext. debt+MLT ext. debt
service (t+1)+CAD (t+1)]
fx off. reserves (t)/MLT ext. debt service (t+1)
12
900
800
700
fx off. reserves/CAD (t+1) (rhs)
300
600
8
250
500
200
400
150
300
100
200
50
100
November
10
6
4
2
2010
* goods and services
Note: for 2010, calculations based on prospective imports
2010***
2009
2009**
2008
2008
2007
2007
2006
2006
2005
2005
2004
0
2004
0
0
**) Estimated MLT debt service and CAD for 2010
***) November 2010 for reserves and ST external debt stock; 2011
estimate for CAD; Dec. 10 - Nov. 11 estimate for MLT debt service
Source: National Bank of Romania; National Institute of Statistics; National Commission of Prognosis
NATIONAL BANK OF ROMANIA
21
Total External Debt
100
MLT External Debt
EUR billion
EUR billion
90
ST debt
(majority private debt)
80
MLT debt
18.3
15.4
70
public and publicly guaranteed debt
private debt
deposits of non-residents
IMF loans (without MPF)
50
80
70
17.5
60
13.5
20.6
60
90
50
10.7
19.9
40
40
12.6
3.2
24.6
28.6
9.2 9.7
35.5
20
7.7
17.0
7.2
10
0
2010*
2009
2008
2007
2006
2010*
2009
2008
2007
2006
2005
2004
2003
30
9.1
5.6 6.0 7.9
5.5 5.7
3.2
0.2 0.2 0.4 0.9 1.0
0
2002
12.4
39.4
25.3
10.0
2005
10 15.0 15.9 18.3
11.3
38.7
2004
1.2 2.0
10.7
51.8
2003
20
6.3
10.2
72.4
2002
30
65.8
38.0
*) November
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
22
Public Debt
35
(according to ESA95)
percent of GDP
30.4
domestic public debt
30
25.7
25
20
foreign public debt
24.9
22.5
23.5
21.5
9.76
6.86
18.7
8.72
6.10
5.28
15
15.8
4.74
10
15.59
15.99
16.15
15.39
13.46
5
11.05
13.4
12.4
12.6
2.56
3.98
9.80
8.59
7.61
2006
2007*
2008*
12.03
5.75
11.50
0
2000
2001
2002
2003
2004
2005
2009*
2010f *
Note: Government securities in MFIs portfolio as a share of GDP in Dec.07=1.4%, Dec.08=2.1%, Dec.09=7.1% and Dec.10=9.9%
*) EDP Notification, October 18, 2010
Source: National Bank of Romania, National Institute of Statistics, European Commission
NATIONAL BANK OF ROMANIA
23
General Government Balance
(according to ESA95)
percent of GDP
-1.5
-1.2
-1.2
-2.0
-2.2
-2.6
-3.5
-4.7
-5.7
-7.2
-8.5
2000
2001
2002
2003
2004
2005
2006
2007* 2008* 2009* 2010f*
*) EDP Notification, October 18, 2010
f) forecast
Revised target for 2010 following the 5th review of the IMF and EU financial assistance arrangement.
Source: Ministry of Public Finance, National Institute of Statistics
NATIONAL BANK OF ROMANIA
24
General Government Balance
(IMF methodology)
percent of GDP
-0.7
-1.3
-1.4
-2.2
-2.6
-3.0
-3.1
-3.2
-4.0
-4.4
-4.8
-6.5
-7.3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f 2012f
f) forecast
Source: Ministry of Public Finance, National Institute of Statistics
NATIONAL BANK OF ROMANIA
25
Eurobond Spreads
700
basis points
Romania (BB+)
Czech Rep. (A)
600
Hungary (BBB-)
Latvia (BB+)
500
Lithuania (BBB)
Poland (A-)
400
300
200
100
Jan.11
Dec.10
Nov.10
Oct.10
Sep.10
Aug.10
Jul.10
Jun.10
May.10
Apr.10
Mar.10
Feb.10
Jan.10
Dec.09
Nov.09
Oct.09
Sep.09
Aug.09
0
Note: The spread is calculated as against the yields on German Bonds, all bonds maturing in 2018.
() Composite rating (Moody's, S&P, Fitch)
Source: Bloomberg
NATIONAL BANK OF ROMANIA
26
Jan.08
Feb.08
Mar.08
Apr.08
May.08
Jun.08
Jul.08
Aug.08
Sep.08
Oct.08
Nov.08
Dec.08
Jan.09
Feb.09
Mar.09
Apr.09
May.09
Jun.09
Jul.09
Aug.09
Sep.09
Oct.09
Nov.09
Dec.09
Jan.10
Feb.10
Mar.10
Apr.10
May.10
Jun.10
Jul.10
Aug.10
Sep.10
Oct.10
Nov.10
Dec.10
Jan.11
Feb.11
Spreads of Five-year CDS for Emerging Economies
in Central and Eastern Europe
1,200
basis points
1,000
800
Romania
Bulgaria
Czech Rep.
Hungary
Latvia
Lithuania
Poland
600
400
200
0
Source: Bloomberg
NATIONAL BANK OF ROMANIA
27
Financial Intermediation*
45
- stock -
percent of GDP
loans to non-financial corporations a.o.
40
loans to households
38.5
40.1
35.6
foreign currency-denominated loans
35
lei-denominated loans
30
26.8
19.2
18.4 19.3
25
20.0
24.1
22.2
20.7
20
16.6
15
10
15.4
13.3
12.7
11.3
20.1
11.8 10.3
5
4.8
6.3
7.4
9.4
11.4
14.1
17.2 16.3
19.3
2007
2008
16.3
16.0
0
2004
2005
2006
2009
*) loans to the private sector/GDP
Source: National Bank of Romania, National Institute of Statistics
NATIONAL BANK OF ROMANIA
28
Loans to the Private Sector
- stock -
real annual percentage change*
real annual percentage change*
200
140
120
lei-denominated loans
households
total
total
180
foreign currency-denominated loans
100
160
non-financial corporations & financial
corporations other than MFIs
140
120
80
100
60
80
40
60
40
20
20
0
0
Jul.10
Jan.10
Jul.09
Jan.09
Jul.08
Jan.08
Jul.07
Jan.07
Jul.06
Jan.06
Jul.05
Jan.05
Jan.04
Jul.10
Jan.10
Jul.09
Jan.09
Jul.08
Jan.08
Jul.07
Jan.07
Jul.06
Jan.06
Jul.05
Jan.05
Jul.04
Jan.04
Jul.04
-20
-20
Note: Starting June 2010, monetary indicators are calculated based on NBR Norms No. 10/2009;
data series for previous period are restated in order to ensure comparability.
Source: National Bank of Romania, National Institute of Statistics
NATIONAL BANK OF ROMANIA
*) based on CPI
29
Domestic credit
annual percentage change
350
300
loans to the private sector
loans to the government sector
250
total
200
150
100
50
0
Sep.10
May.10
Jan.10
Sep.09
May.09
Jan.09
Sep.08
May.08
Jan.08
Sep.07
May.07
Jan.07
Sep.06
May.06
Jan.06
Sep.05
May.05
Jan.05
Sep.04
May.04
Jan.04
-50
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
30
Domestic credit
300
lei billion, end of period
loans to the private sector
(deflated by CPI, Dec. 2010=100)
250
loans to the government sector
total
200
150
100
50
Dec.10
Aug.10
Apr.10
Dec.09
Aug.09
Apr.09
Dec.08
Aug.08
Apr.08
Dec.07
Aug.07
Apr.07
Dec.06
Aug.06
Apr.06
Dec.05
Aug.05
Apr.05
Dec.04
0
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
31
percent
100
200
90
180
80
160
70
140
60
120
50
100
40
80
currency in circulation
overnight deposits
deposits with an agreed maturity
of up to and including two years
Dec.10
Jun.10
Dec.09
Jun.09
Dec.08
Jun.08
Dec.07
Jun.07
Dec.06
Jun.06
Dec.05
Jun.05
Dec.04
Dec.10
Jun.10
Dec.09
Jun.09
Dec.08
0
Jun.08
0
Dec.07
10
Jun.07
20
Dec.06
20
Jun.06
40
Dec.05
30
Jun.05
60
Dec.04
(deflated by CPI, Dec. 2010=100)
220
Broad Money (M3)
lei billion
other marketable instruments*
Note: Starting June 2010, monetary indicators are calculated based on NBR Norms No. 10/2009;
data series for previous period are restated in order to ensure comparability.
*) repurchase agreements, money market fund shares and units, negotiable debt
Source: NBR, NIS
securities with a maturity of up to and including two years
NATIONAL BANK OF ROMANIA
32
corporations*
120
110
100
90
80
70
60
50
40
30
20
10
0
Dec.10
Jun.10
Dec.09
Jun.09
Dec.08
Jun.08
Dec.07
Jun.07
Dec.06
Jun.06
Dec.05
Jun.05
Dec.04
Dec.10
Jun.10
Dec.09
Jun.09
Dec.08
Jun.08
households
Dec.07
Jun.07
Dec.06
Jun.06
Dec.05
corporations*
households
Jun.05
120
110
100
90
80
70
60
50
40
30
20
10
0
(in real terms)
foreign currency-denominated deposits
lei billion
lei-denominated deposits
lei billion
Dec.04
(deflated by CPI, Dec. 2010=100)
Private Sector Deposits
*) non-financial corporations and financial corporations other than MFIs
Note: Starting June 2010, monetary indicators are calculated based on NBR Norms No. 10/2009;
data series for previous period are restated in order to ensure comparability.
Source: National Bank of Romania, National Institute of Statistics
NATIONAL BANK OF ROMANIA
33
Non-financial Corporations' Loans and Deposits
70
60
50
40
30
20
10
0
10
20
30
40
50
60
70
lei billion
lei billion
lei-denominated deposits
lei-denominated loans
net position, lei
2004
2005
2006
foreign currency-denominated deposits
foreign currency-denominated loans
net position, FX
2007
2008
2009
70
60
50
40
30
20
10
0
10
20
30
40
50
60
70
Dec.
2010
Note: Starting June 2010, monetary indicators are calculated based on NBR Norms No. 10/2009;
data series for previous period are restated in order to ensure comparability.
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
34
Households' Loans and Deposits
80
70
60
50
40
30
20
10
0
10
20
30
40
50
60
70
lei billion
lei billion
lei-denominated deposits
lei-denominated loans
net position, lei
2004
2005
2006
foreign currency-denominated deposits
foreign currency-denominated loans
net position, FX
2007
2008
2009
Note: Starting June 2010, monetary indicators are calculated based on NBR Norms No. 10/2009;
data series for previous period are restated in order to ensure comparability.
80
70
60
50
40
30
20
10
0
10
20
30
40
50
60
70
Dec.
2010
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
35
Analysis Ratios for the Banking System
30
percent
3.5
solvency ratio
3.03
leverage ratio (tier 1 capital / total assets)
25
2.59
liquidity ratio (rhs)
20.64
20
21.09
2.31
2.5
21.07
2.28
2.47
18.12
2.13
14.67
15
13.78
10
14.98
14.33
14.59
14.66
1.39
1.35
1.38
1.36
10.89
9.18
1
8.63
5
0
Dec.03
2
1.5
13.76
1.38
8.93
3
7.32
8.13
7.55
8.09
7.91
7.89
7.87
0.5
Dec.04
Dec.05
Dec.06
Dec.07
Dec.08
Dec.09
Mar.10
Jun.10
Sep.10
0
Dec.10
Note: At present, no credit institution has a solvency ratio below the 10 percent threshold.
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
36
Developments in Non-Performing Loans
percent in total loan portfolio
14
loans and related interest classified under "loss" 1)
12
loans and related interest classified under "loss" 2)*
10.0
10
10.8
11.3
11.7
11.7
11.9
11.9
10.2
7.9
8
6.5
6
4.7
4.0
4
2
3.6
4.1
3.9
4.4
4.2
4.4
4.5
4.2
4.6
4.8
4.5
2.8 2.5
2.2
1.7
1.7 1.61.8 1.6
1.4
Dec.10
Nov.10
Oct.10
Sep.10
Aug.10
Jul.10
Jun.10
May.10
Dec.09
Sep.09
Jun.09
Mar.09
Dec.08
Sep.08
Jun.08
Mar.08
0
*) This NPLs definition is in line with the recommendations of the IMF guide and allows international comparisons.
1) overdue loans up to 90 days for which exposure to the risk entity was reduced by 100% of collateral value
2) overdue loans for more than 90 days for which exposure to the risk entity was reduced by at most 25% of collateral value
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
37
Banking System Profitability
percent
lei million
4,401
45
4,500
40
4,000
Net profit (rhs)
35
3,500
30
ROE
2,533
25
2,061
1,785
20
3,000
2,500
2,206
ROA
2,000
15
1,500
10
680 816
5
261 440
1,000
302
500
90
33
-628
Oct.10
Sep.10
Jun.10
May.10
Apr.10
Mar.10
Feb.10
Jan.10
Dec.09
Sep.09
Jun.09
Mar.09
Dec.08
Dec.07
Dec.06
Dec.05
Dec.04
-718
Aug.10
-577
-10
-474
-463
-304 -500
-1,000
Dec.10
-205 -235
-209
Jul.10
-5
0
Nov.10
0
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
38
Gross and Net Exposure (Loans and Interests of Non-bank Clients)
and Related Provisions
lei billion
lei billion
250
22
195 190 192 193
188 193
200
199
193 193 193 194
15
150
16
23
24
25
207 21
20 203
174
161
23
23
204 204 203 204
206
20
19
16
17
18
gross exposure
15
13
10
100
net exposure
11
59 63
4
65
57
5
55
56
58
60
59
61 62
67
68
65
62
61
Sep.10
Aug.10
Jul.10
Jun.10
May.10
Apr.10
Mar.10
Feb.10
Jan.10
Dec.09
Sep.09
Jun.09
Mar.09
Dec.08
Sep.08
Jun.08
Mar.08
0
68 69
70
5
0
Dec.10
6
Nov.10
50
Oct.10
55
10
provisions (rhs)
8
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
39
Past-due and Doubtful Claims in Own Capital and Total Bank Assets
percent
2.2
percent
22
19.8
2.0
past-due and doubtful claims (net)
in total net assets
1.8
16.6
18
16.8
1.6
past-due and doubtful claims (net)
in own capital (rhs)
1.4
14.6
11.8
1.2
1.8
1.5
16
1.5
14
1.4
12
10.5
1.0
10
9.0
1.0
0.8
8
0.9
6.0
0.6
0.4
4
2
0.2
Dec.10
Sep.10
Jun.10
Mar.10
Dec.09
Sep.09
Jun.09
0
Mar.09
0.1
Dec.08
0.2
6
0.3
Dec.07
Dec.04
0.0
1.1
Dec.06
0.2
1.2
Dec.05
1.4
0.2
1.6
0.8
0.5
3.2
20
Source: National Bank of Romania
NATIONAL BANK OF ROMANIA
40
BANKING INDICATORS
(Banks, Foreign Bank Branches and CREDITCOOP)
percent
Indicators
Dec.07 Mar.08 Jun.08 Sep.08 Dec.08 Mar.09 Jun.09 Sep.09 Dec.09 Mar.10 Jun.10 Sep.10 Dec.10
Capital adequacy
1 Solvency ratio (>8%)
13.78
12.99
12.78
11.85
13.76
13.16
13.51
13.73
14.67
14.98
14.33
14.59
14.66
7.32
7.20
7.30
7.10
8.13
6.81
6.92
7.04
7.55
8.09
7.91
7.89
7.87
3 Loans to non-bank clients (gross value)/ Total assets (gross value)
59.09
62.06
63.47
65.04
62.50
60.00
59.11
60.34
59.13
60.38
61.24
60.76
58.66
4 Placements and loans to other banks (gross value)/ Total assets (gross value)
29.98
27.54
26.09
24.79
26.01
24.98
23.91
21.91
23.03
19.94
19.28
18.54
19.59
5 Overdue and doubtful loans granted to non-bank clients / Total loan portfolio (net value) (2)
0.22
0.22
0.30
0.24
0.32
0.67
1.03
1.27
1.50
2.04
2.23
2.72
0.00
6 Overdue and doubtful loans granted to non-bank clients / Total loan portfolio (gross value) (2)
0.77
0.83
0.95
1.07
1.37
2.16
2.68
3.13
3.94
5.04
5.92
7.09
7.08
7 Overdue and doubtful claims granted to non-bank clients / Total assets (net value) (2)
8 Provisioning for risk-weighted exposure of banks to bank and non-bank loans and interbank
placements and related interest classified under “substandard”, “doubtful” and “loss” (3)
0.17
0.19
0.25
0.22
0.29
0.52
0.75
0.92
1.01
1.38
1.52
1.82
1.49
85.40
90.50
91.00
89.70
86.20
88.50
89.60
87.74
88.04
87.85
89.54
89.31
88.80
9 ROA (Net profit /Total assets, average)
1.01
1.51
1.44
1.77
1.56
-0.25
0.05
0.28
0.25
0.55
-0.15
-0.19
-0.09
10 ROE (Net profit / Own capital, average)
Liquidity
9.43
16.45
15.82
19.41
17.04
-2.90
0.64
3.22
2.89
5.96
-1.58
-2.13
-1.02
38.70
34.98
33.23
31.74
34.43
33.05
33.62
34.66
35.28
37.07
35.86
36.74
37.85
2.13
2.29
2.30
2.45
2.47
2.31
2.39
1.63
1.38
1.39
1.35
1.38
1.36
108.72 116.10 119.64 124.71 122.03 124.69 119.23 117.55 112.80 113.24 117.46 116.26
113.46
2 Leverage ratio (1)
Asset quality
Profitability
11 Immediate liquidity (4)
12 Liquidity ratio (effective liquidity / required liquidity) (5)
13 Loans to clients / Deposits from clients
Note:
(1) Level 1 own funds / Total average assets (net value).
(2) These ratios are b ased on b alance sheet data and include overdue loans / claims with maturity shorter than 30 days and those under legal proceedings.
(3) These ratios are b ased on data from the loan classification prudential reporting. According to NBR Regulation no. 3/2009 on the classification of loans and investments, and the estab lishment, regularisation
and use of specific credit risk provisions – that replaced NBR Regulation no. 5/2002 b eginning with Septemb er 2009 –, the loans granted b y credit institutions to the non-b anking sector are classified under five categories: standard, watch, sub standard, doub tful and loss. Credit exposures for loans granted to non-b anking sector are classified b y the reporting institutions according to the deb t service (the numb er of days
past due from the maturity date), the financial performance of the deb tors and the initiation of legal proceedings. Also, further to the contagion criterion application, the loans granted to a single deb tor are
classified into a single category, i.e. the worst one. Consequently, non-performing loans include not only the effective loss, b ut also potential losses. For instance, a credit would b e classified as loss through
contagion, even if the deb t service is good.
(4) The numerator of this ratio is represented b y cash, sight and term deposits with b anks at net value plus government securities free of pledge, while the denominator includes total liab ilities.
(5) New amendments to NBR Norms no.1/2001 on b anks' liquidity have b een in place starting with July 2009, mainly consisting in tighter criteria for the assessment of required liquidity. Furthermore NBR Norms no.1/2001 were replaced b y new liquidity rules (NBR Rules no. 24/2009 on credit institutions' liquidity effective Decemb er 2009).
x = it is not the case because the frequency of the solvency ratio is quarterly.
Source: National Bank of Romania.
NATIONAL BANK OF ROMANIA
41
Households' Non-performing Loans Ratio*
*
weight in the total of each category (%)
weight in the total of each category (%)
12
10
consumer credit
FX-denominated loans
mortgage loans
lei-denominated loans
total
total
10
9
8
7
8
6
5
6
4
4
3
2
2
1
0
Source: NBR, Central Credit Register, Credit Bureau
Sep.10
Jun.10
Mar.10
Dec.09
Sep.09
Jun.09
Mar.09
Dec.08
Sep.08
Sep.10
Jun.10
Mar.10
Dec.09
Sep.09
Jun.09
Mar.09
Dec.08
Sep.08
0
*90 days past due loans (using contagion by debtor at bank level)
in total loans
NATIONAL BANK OF ROMANIA
42
Companies' Non-performing Loans Ratio*
weight in the total of each category (%)
weight in the total of each category (%)
lei-denominated loans
corporations
FX-denominated loans
total
total
Source: Central Credit Register
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
Dec.08
Jan.09
Feb.09
Mar.09
Apr.09
May.09
Jun.09
Jul.09
Aug.09
Sep.09
Oct.09
Nov.09
Dec.09
Jan.10
Feb.10
Mar.10
Apr.10
May.10
Jun.10
Jul.10
Aug.10
Sep.10
Oct.10
Nov.10
SMEs
Dec.08
Jan.09
Feb.09
Mar.09
Apr.09
May.09
Jun.09
Jul.09
Aug.09
Sep.09
Oct.09
Nov.09
Dec.09
Jan.10
Feb.10
Mar.10
Apr.10
May.10
Jun.10
Jul.10
Aug.10
Sep.10
Oct.10
Nov.10
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
*90 days past due loans (using contagion by debtor at bank level) in total
loans. Liquidation procedures are also taken into account
NATIONAL BANK OF ROMANIA
43
Companies' Non-performing Loans Ratio* by Sector
December 2009
November 2010
percent
Services,
15.7
percent
Agriculture,
Real estate,
4.4
6.5
Mining,
0.6
Real estate,
12.7
Manufacturing,
23.7
Agriculture,
4.0
Mining,
0.4
Manufacturing,
23.3
Services,
13.3
Energy,
1.5
Trade,
32.0
Source: Central Credit Register
Construction,
15.6
Energy,
1.0
Trade,
31.1
Construction;
14.2
*90 days past due loans (using contagion by debtor at bank level) in
total loans. Liquidation procedures are also taken into account
*Loans overdue for at least 1 day, as recorded in banks' balance-sheets
NATIONAL BANK OF ROMANIA
44