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Developments in loan and deposit markets in June 2020



In June 2020, new loans1 extended by banks totalled MDL 3,002.9 million, an increase of 6.1%, compared to June 2019.

The share of loans issued in domestic currency totalled 72.7%, in foreign currency – 25.5%, while foreing-currency-linked2 – 1.8% (Chart 1, upper chart).

The amount of loans issued in domestic currency constituted MDL 2,182.2 million (+50.7% compared to the previous month and +5.0% compared to June 2019 (Chart 1, lower chart)).

The amount of loans issued in foreign currency recalculated in MDL, totalled MDL 767.3 million (+51.8% compared to the previous month and +4.7% compared to June 2019 (Chart 1, lower chart)).

The amount of foreign-currency-linked loans constituted MDL 53.4 million (-8.9% compared to the previous month and 2.8 times more  compared to June 2019) (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 June 2020.


It should be mentioned that, in terms of maturity, loans with maturity ranging from 2 to 5 years recorded the highest demand (42.7% of total loans extended), out of which the largest share of 26.4% of the total loans was held by businesses (Chart 2).

Chart 2
New loans extended by maturity and their shares, %

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in June 2020.

Domestic currency loans were mainly represented by loans extended to legal entities (60.6%), including loans extended to non-financial commercial companies holding a share of 56.3% (43.3% belong to trade) (Chart 3).


Foreign currency loans were mainly requested by non-financial commercial companies (96.8%), and the largest share (46.2%) belongs to trade.

Chart 3
Domestic currency loans by business sectors, %

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in June 2020.


New loans in domestic currency were extended at an average interest rate of 8.16%, the loans in foreign currency – 4.0% and foreign-currency-linked – 4.85%.

Chart 4
Weighted average interest rates on new loans, %

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in June 2020.

Average interest rate of domestic currency loans decreased by 0.24 percentage points compared to the previous month. Individuals received loans at an average interest rate of 7.61%, legal entities – at a rate of 8.44%, while individuals performing an activity3 – at a rate of 9.70% (Chart 4).

Average interest rate of foreign currency loans decreased by 0.43 percentage points compared to May 2020. Individuals received loans at an average interest rate of 6.75%, businesses – at a rate of 4.00%, while individuals performing an activity – at a rate of 5.00%.

Average interest rate of foreign-currency-linked loans increased by 0.63 percentage points, compared to May 2020. Individuals received loans at an average interest rate of 6.05%, legal entities – at a rate of 4.35%.

Compared to the similar period of the previous year, the interest rates of domestic currency loans increased by 0.05 percentage points, of foreign currency loans decreased by 0.40 percentage points and foreign-currency-linked loans increased by 0.29 percentage points.


Chart 5
The volume (million MDL) and the average interest rates of loans issued to individuals, in domestic currency (%)

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in June 2020.

The volume of loans in domestic currency issued to individuals in June 2020 increased in comparison with the previous month by 65.0% and totalled MDL 811.0 million (Chart 5). The average rate of loans in domestic currency issued to individuals in the same period decreased by 0.43 percentage points and constituted 7.61%. From the perspective of scope of issued loans, the consumer loans had the highest share (67.6%). In comparison with the previous reference month, the rate of consumer loans decreased by 0.47 percentage points, and the rate of mortgage loans - by 0.34 percentage points. Compared to the previous year, the rate of consumer loans increased by 0.35 percentage points, while of mortgage loans - by 0.17 percentage points. It should be mentioned that the share of mortgage loans issued in domestic currency constituted 95.9% (4.1% refer to the foreing-currency-linked loans), while consumer loans – 98.9% (1.0% were issued as foreing-currency-linked).


Chart 6
Average interest rates of domestic currency loans, by maturity, %

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in June 2020.

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% (8.50% - for legal entities, 7.49% - for individuals, and 9.30% for individuals performing an activity), (Chart 6).

It should be mentioned that the highest average interest rate of extended domestic currency loans was registered for loans with maturity up to 1 month, and constituted 9.09% (9.10% - for legal entities, 8.91% - for individuals). Individuals performing an activity did not apply for loans foreing-currency-linked up to 1 month (Chart 6).


Chart 7
Average interest rates of foreign currency loans, by maturity, %

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in June 2020.

The most attractive foreign currency loans with maturity from 1 to 2 years were extended at an average interest rate of 3.58%, where individuals were granted loans with an average interest rate of 7.98%, legal entities – with an average rate of 3.58% (Chart 7).


Chart 8
Average interest rates of loans foreing-currency-linked by maturity, %

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in June 2020.

The most attractive loans foreing-currency-linked, with maturities from 2 to 5 years, have been issued at an average interest rate of 5.16%, individuals received loans at an average interest rate of 6.81%, while legal entities – at an average rate of 4.13%, (Chart 8).


In June 2020, the new term deposits totalled MDL 1,882.6 million, decreasing by 13.8% compared to June 2019 (Chart 9).

Chart 9
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 of new loans and deposits recorded in the banking system in June 2020.

Domestic currency deposits totalled MDL 1,221.7 million (+18.8% compared to the previous month and -6.2% compared to June 2019).

Foreign currency deposits recalculated in MDL totalled MDL 660.9 million (+12.5% compared to the previous month and -24.9% compared to June 2019).

Domestic currency deposits accounted for a share of 64.9%, while foreign currency deposits -35.1%.

Chart 10
Total deposits by maturity and shares held, %

Source: Report of the NBM on average rates on new loans and deposits recorded in the banking system in June 2020.

In June 2020, the largest share of deposits was represented by deposits of individuals – 71.2% (of which 44.1% represent domestic currency deposits, and 27.1% - foreign currency deposits).

In terms of maturity, the highest demand was recorded for deposits with terms from 6 to 12 months (40.6% of total term deposits). It is worth mentioning that by categories of clients, a significant share of deposits was held by individuals (29.9% of total deposits).


The average interest rate of domestic currency term deposits constituted 3.79%, and of foreign currency – 0.90%.

Chart 11
Weighted average interest rates of new deposits, %

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in June 2020.

The average interest rate of new domestic currency term deposits increased by 0.16 percentage points compared to the rates of the previous month. Individuals placed deposits at an average interest rate of 4.24%, legal entities – at an average rate of 2.83%, while individuals performing an activity – at an average interest rate of 3.22%.

The average interest rate of new foreign currency term deposits increased by 0.04 percentage points compared to May 2020. Individuals placed deposits at an average interest rate of 0.89%, legal entities – at an average rate of 0.92%, while individuals performing an activity did not place new deposits in foreign currency.

Compared to the similar period of the previous year, the average interest rates of domestic currency deposits decreased by 0.81 percentage points (deposits of individuals decreased by 0.53 percentage points, while for legal entities - by 1.18 percentage points, and for individuals performing an activity – by 1.21 percentage points). The average interest rate of foreign currency deposits decreased by 0.14 percentage points (deposits of individuals decreased by 0.04 percentage points, of legal entities decreased – by 0.90 percentage points, while individuals performing an activity- did not place foreign currency deposits during the reference period or in June 2019).

Chart 12
Average interest rates of domestic currency deposits, by maturity, %

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in June 2020.

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 4.06% (deposits for individuals – at a rate of 4.20%, for legal entities – at a rate 3.63%, and for individuals performing an activity- at a rate 2.25%) (Chart 12). The most attractive foreign currency deposits, also, were recorded for the term deposits with maturity from 6 to 12 months were placed at an average interest rate of 0.74% (for individuals – at a rate of 0.83%, for legal entities – at a rate of 0.50%). (Chart 13)

The highest average interest rate of domestic currency deposits was recorded for the term deposits with maturity from 1 to 2 years for individuals  and for legal entities – 5.06% and 4.35 %, respectively. In the case of individuals performing an activity registered a rate of 3.50% for term deposits with maturity from 3 to 6 months. (Chart 12)

Chart 13
Average interest rates of foreign currency deposits, by maturity, %

Source: Report of the NBM on average rates of new loans and deposits recorded in the banking system in June 2020.

The highest average interest rate of foreign currency deposits was recorded for the deposits with maturity from 2 to 5 years for individuals (1.25%), and for legal entities (1.74%).


Interest rate margin of domestic currency transactions constituted 4.37 percentage points, while of foreign currency – 3.10 percentage points.

Chart 14
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 June 2020.

Interest rate margin of domestic currency transactions decreased by 0.40 percentage points compared to the values of the previous month and increased by 0.86 percentage points compared to June 2019. (Chart 14)

Interest rate margin of foreign currency transactions decreased by 0.47 percentage points compared to the previous month and by 0.26 percentage points compared to June 2019.

 


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 Decision No 331 of 1 December 2016 of the Executive Board of the NBM, Official Monitor of the Republic of Moldova, No 441-451 of 16 December 2016, with further amendments and completions.

2. Loans foreign-currency-linked, according to the Regulation on the open currency position of the bank, approved by Decision of the Executive Board of the National Bank of Moldova No 126 of 28.11.1997, Official Monitor of the Republic of Moldova no. 112-114/198 of 14.10.1999, with further modifications and completions, refer to the assets which balance, according to the conditions established in the relevant contracts concluded by the bank, shall be modified depending on the evolution of the exchange rate of Moldovan currency against the attached exchange rate.

3. Individuals performing an activity, according to the Guidelines on the drafting by the licensed banks of the Report on monetary statistics, approved by Decision of the Executive Board of the NBM no. 255 of 17.11.2011, Official Monitor of the Republic of Moldova no. 206-215 of 02.12.2011, with further modifications and completions, work in associations without legal personality and are producers of goods and/or services for market, and namely, individual enterprises, farms, patent holders, notaries, lawyers, bailiffs, etc.”

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