Anca Dragu
The National Bank’s annual report on financial stability contains significant indicators of sustainability. The financial stress index (0.44) was below the threshold value (0.58). The level of banking sector vulnerability is below the zero signal (-0.60). All this indicates normal conditions of functioning, without accumulation of systemic risk.
“All these achievements contribute to the implementation of the measures of the National Program on EU accession and financial integration. The focus will be on stability and empowerment of the financial system. In this, the role of the FSAP (Financial Sector Assessment Program) assessment, recently conducted by the IMF and the World Bank, which supports the consolidation of the banking system in line with the highest international standards, is very important,” NBM Governor Anca Dragu said on May 30 at a meeting with IMF Managing Director Kristalina Georgieva on the sidelines of the ongoing forum of central bank governors in Dubrovnik, Croatia.
The risk of direct contagion remains low, mainly because banks retain a predominant reliance on credit institutions outside the country. Common Diagnostics, however, discounts external factors, speaking of an established silence. The money loving her depends largely on the situation in the global financial system, the NBM believes.
In the organizational self-analysis, geopolitical, macroeconomic and sovereign risks are still perceived by banks as the most significant. And the danger of cyber attacks, in their perception, occupies higher and higher positions in the hierarchy of possible problems.
On the supply and demand side, the banking community is not alarmed by the modest progress in credit supply and demand. Banks reported a slight easing of lending standards for both the corporate and consumer sectors, with little enthusiasm in either segment.
According to the NBM, credit risk is still the main risk for the banking segment. Especially – in the retail lending sector. The risk profile of individual borrowers remains cautious: 70.1% of new loans have a debt service to income (DSI) ratio of less than 40% and 91.5% have a DSI ratio of less than 55%. In addition, 94.4% of these loans were originated with loan-to-value (LTV) ratios below 80%.
In terms of the quality of the loan portfolio, there was a slight improvement at the end of last year: the balance of overdue loans to legal entities increased slightly, but their share in the total volume of loans issued decreased to 2.2%.
At the same time, a 13.9% decrease in overdue loans was recorded among individuals. At the same time, the share of overdue loans in the total volume of loans related to this segment amounted to 1.5%.
