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    2nd Monday of the month: 14.00-17.00;
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    3rd Monday of the month: 14.00-17.00;
    Appointment: +373 22 822 607;

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    4th Monday of the month: 14.00-17.00;
    Appointment: +373 22 822 607.

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Developments in loan and deposit markets in August 2019



In August 2019, new loans1 extended by banks totalled MDL 2,609.2 million, an increase of 7.5%, compared to August 2018.

The share of loans issued in domestic currency totalled 69.1%, while in foreign currency – 30.9% (Chart 1, upper chart).

The amount of loans issued in domestic currency constituted MDL 1,803.1 million (-13.0% compared to the previous month and +21.8% compared to August 2018 (Chart 1, lower chart)).

Foreign currency loans recalculated in MDL, totalled MDL 806.2 million (+3.7% compared to the previous month and -14.8% compared to August 2018 (Chart 1, lower chart)).

Chart 1
Dynamics of new loans, million MDL (upper chart) and the annual growth rate of new loans extended by banks, % (lower chart)

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in August 2019.

It should be mentioned that, in terms of maturity, loans with maturity ranging from 2 to 5 years recorded the highest demand (44.9% of total loans extended), out of which the largest share of 26.3% was held by legal entities (Chart 2).

Chart 2
New loans extended, by maturity terms and shares held, %

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

Domestic currency loans were mainly represented by loans extended to individuals2 (53.1%), while in the category of legal entities -  by loans extended to non-financial commercial companies holding a share of 41.9% from the total loans granted in MDL (54.6% belong to trade companies) (Chart 3). 

Foreign currency loans were mainly requested by non-financial commercial companies (95.8%), trade companies having the biggest share (63.5%).

Chart 3
Domestic currency loans by business sectors, %

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

 

New loans in domestic currency were extended at an average interest rate of 8.13%, while the loans in foreign currency – 4.58%.

Chart 4
Weighted average interest rates on new loans, %

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

Average interest rate on domestic currency loans increased by 0.13 percentage points compared to the previous month. Individuals received loans at an average interest rate of 7.70%, while legal entities – at a rate of 8.61% (Chart 4).

Average interest rate on foreign currency loans increased by 0.16 percentage points compared to July 2019. Individuals received loans at an average interest rate of 6.67%, while legal entities – at a rate of 4.53%.

Compared to the similar period of the previous year, the interest rates of domestic currency loans diminished by 0.32 percentage points, while for foreign currency loans – increased by 0.05 percentage points.

Chart 5
Average interest rates on domestic currency loans, by maturity term, %

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

Domestic currency loans with maturity from 2 to 5 years recorded the highest demand in the reporting month and were extended at an average interest rate of 8.06% (8.65% for legal entities and 7.55% - for individuals) (Chart 5).

It should be mentioned that the highest average interest rate of extended domestic currency loans was registered for loans with maturity for up to 1 month (10.47%), where individuals received loans at an interest rate of 10.23%, while legal entities – 10.52% (Chart 5).

Chart 6
Average interest rates on foreign currency loans, by maturity term, %

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

The most attractive foreign currency loans with maturity from 1 to 2 years were extended at an average interest rate of 4.63%, where individuals were granted loans with an average interest rate of 7.99%, and legal entities - 4.63% (Chart 6).

 

In August 2019, the new term deposits totalled MDL 2,768.4 million, decreasing by 27.9% compared to August 2018 (Chart 7).

Chart 7
Dynamics of term deposits (upper chart) and their modification compared to the previous month (lower chart), million MDL

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

Domestic currency deposits totalled MDL 1,453.3 million (-5.6% compared to the previous month and -44.7% compared to August 2018).

Foreign currency deposits recalculated in MDL totalled MDL 1,331.1 million (+52.7% compared to the previous month and +7.2% compared to August 2018).

Domestic currency deposits accounted for a share of 51.8%, while foreign currency deposits -48.2%.

Chart 8
Total deposits by maturity terms and shares held, %

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

In August 2019, the largest share of deposits was represented by deposits of individuals – 85.5% (of which 40.9% represent domestic currency deposits, and 44.6% - foreign currency deposits).

In terms of maturity, the highest demand was recorded for deposits with terms from 6 to 12 months (46.1% of total term deposits). It is worth mentioning that by categories of clients, a significant share of deposits was held by individuals (41.4% of total deposits placed).

 

The average interest rate for domestic currency deposits constituted 4.54%, and in foreign currency – 1.04%.

Chart 9
Weighted average interest rates on new deposits, %

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

The average interest rate on new domestic currency term deposits did not change compared to the rates of the previous month. Individuals placed deposits at an average interest rate of 4.89%, while legal entities – at 3.21%.

The average interest rate on new foreign currency term deposits decreased by 0.10 percentage points compared to July 2019.  Individuals placed deposits with an average interest rate of 0.98%, while legal entities – at 1.82%.

Compared to the similar period of the previous year, the average interest rates of domestic currency deposits increased by 0.35 percentage points (deposits of individuals increased by 0.22 percentage points, while those of legal entities decreased by 0.58 percentage points). The average interest rate of foreign currency deposits increased by 0.18 percentage points (deposits of individuals increased by 0.18 percentage points, while of legal entities – decreased by 0.07 percentage points).

Chart 10
Average interest rates of domestic currency deposits, by maturity terms, %

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

Domestic currency deposits with maturity from 6 to 12 months, which recorded the highest demand in the reporting period, were placed at an average interest rate of 4.84% (deposits for individuals – at a rate of 5.04%, for legal entities – at 3.34%) (Chart 10), whereas the foreign currency deposits – at 0.94% (deposits for individuals – at 0.89%, for legal entities – at 1.61%) (Chart 11).

The highest average interest rate of domestic currency deposits was recorded for the deposits of individuals with maturity over 5 years (5.75%) and from 1 to 2 years (5.27%), and for legal entities – for the deposits with maturity from 1 to 2 years (5.05%) (Chart 10)

Chart 11
Average interest rates on foreign currency deposits, by maturity terms, %

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

The highest average interest rate of foreign currency deposits was recorded for the deposits of individuals with maturity of over 5 years (1.37%), and for the deposits of legal entities - with maturity from 1 to 2 years (2.22%).

 

Interest rate margin for domestic currency transactions constituted 3.59 percentage points, while for foreign currency – 3.54 percentage points.

Chart 12
Bank interest margin, annual percentage points

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in August 2019.

Interest rate margin of domestic currency transactions increased by 0.12 percentage points compared to the previous month and by 0.67 percentage points compared to August 2018.

Interest rate margin of foreign currency transactions increased by 0.06 percentage points compared to the previous month and decreased by 0.13 percentage points compared to August 2018. 

 

______________________________________________

1. The data of this report is presented according to the Guidelines on Preparation and Presentation of Reports on Interest Rates applied by banks in the Republic of Moldova, approved by the Decision of the Executive Board of the NBM No 331 of 1 December 2016, Official Monitor of the Republic of Moldova, No 441-451 of 16 December 2016, with further amendments and completions.

2. Including individuals performing entrepreneurial activity.  

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