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Moldova's banking system gets out of crisis. The assets increased in 2010, especially the loan portfolio. The latter's rate dropped to historical minimal levels. Yet, the burden of non-performing loans remain, though less acute than one year ago.
The first signs of re-launch appeared at the end of the first quarter after a period of recession that started in late 2008. At the end of last March, the banking sector became profitable again, and the assets started growing, just like the other related indexes.
During the first 11 months of 2010, the first-degree capital increased 8.43 per cent up to 6.968,3 million lei. This shows a better capacity of the banks to cover eventual losses and ensure a better protection of depositors' interests. For comparison, in the same period of 2009, the first-degree capital recorded a two-per cent decrease, and the bankruptcy of a bank fueled the uncertainty of those who were depositing money in banks.
The average of the risk capital's sufficiency in the system stood at a high level in late last November - 30.8 per cent, with the necessary level being of 12 per cent. "The indexes of the risk capital's sufficiency and current liquidity remain at rather high levels, despite a slight decrease against early 2010. They reflect a good capacity to cope with the crisis situations at the level of the entire banking system," experts of the Viitorul (Future) institute of development and social initiatives have said. Though, they added, "the high values of the liquidity leads to an inefficient use of available resources and reduces the banks' profitableness."
The assets' increased by 4.13 per cent in the first 11 months of 2010 up to 41.58 billion lei. During the last November alone, the assets increased by 478.6 million lei in the entire banking sector. "The increase of the first-degree capital and assets are firm signs of the banking system's getting out of the crisis, after the assets have continuously dropped starting from the third quarter of 2008," financial experts said. And the National Bank finds out that the evolution of this index shows "an extensive development of the system."
This is a positive tendency, against the similar period of 2009, when the assets' overall value decreased by 2.5 per cent in the first 11 months.
Though more exigent than ever, after the problems they faced and are still facing with the repayment of the loans given before the crisis, the banks provided more loans in 2010. The gross loan portfolio in the banking system grew by almost 3 billion lei or 13 per cent in the first 11 months of 2010. "The crediting evolutions on the rise were triggered by an economic growth on the whole at the level of the entire Moldovan economy," the Viitorul experts said. A higher increase of the loans and net leasing, by respectively 13.69 per cent against the total figure of the loan and leasing (+13 per cent) shows, in fact, an improvement of the loan portfolio's quality and a dropping pressure of the non-performing loans, which will exert pressure on some banks another 2-3 years,
The banking sector recovers after a 1.5-year period of recession; the average rate of the interests on loans decreased to a historical minimal level of 14.8 per cent in November 2010.
And the deposits also registered a recovery after the 2009 decline, despite a cut of the interests against 2009. During the first 11 months of 2010, the deposits increased by 5.3 per cent up to 27.8 billion lei and the term savings of private people increased even more - by 6.23 per cent.
"The tendencies of increasing of the crediting and attracted deposits will be maintained both till late 2010 and during the entire 2011 year; they are fuelled by the economic growth and the remittances increase, although the pace will not be spectacular, but with more pronounced evolutions in the second and fourth quarters," financial experts said.
On the background of these positive evolutions of the banking system, the company EVM Consulting Ltd found out an increase of the banking efficiency. After the first nine months, Moldova-Agroindbank, Victoriabank and Moldindconbank are on the first three positions. Moldova-Agroindbank stays firmly on the first position, the company said. This bank's greatest achievement is the clients - over 600,000. In this way, the bank will enter the 2011 year, when it will mark its 20th anniversary, with a record number of clients. "This fact is due to a continuous extension and diversification of the portfolio of goods and services provided to clients, as well as to an increase of the level of their accessibility. In 2010, the bank was more times appreciated at the international level as the best bank in terms of money transfer servicing, the most stable bank, the best bank in Moldova of the 2000-2010 decade, the best Moldovan bank according to the increase of assets, capital, gross profit, capital's profitability," the bank's press service has said.
The National Bank of Moldova said that, although five banks are likely to end this year with losses because of the problems they have with non-performing loans, the net income amounted to about 470 million lei in the banking system on the whole. And this after the banking system had losses of 172 million lei in late 2009.
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