Furthermore, the bank’s management indicated that the current lending deadlock is due mainly to a decline in demand for loans from individuals and companies.
“I do not believe there has ever been such high liquidity in the Romanian banking system. We are talking about major liquidity on the market. The prospect of a shortage of funds in the local banking system is close to zero," according to BRD Executive Officer Claudiu Cercel.
Lending is subject to constant decline, according to data released by the National Bank of Romania (BNR). This is due to a sharp depreciation of the leu and higher interest rates, making loans more expensive, and also because of a deadlock on the real estate market, as potential buyers are waiting for prices to drop even further.
