Romanian NBFI Market Reaches 6.4 Bln Euros

The Romanian market of non-bank financial institutions (NBFIs) which includes consumer finance and leasing companies, amounted to 23 billion RON (almost 6.4 billion euros) last year, according to the Financial Stability Report released by the NBR (National Bank of Romania), Ziarul Financiar reported.

Financing granted by NBFIs accounts for 13% of all credits granted, the banking system included. The overall volume of credits amounted to 172 billion RON (47.6 billion euros).

Financial leasing accounts for the bulk (82%) of overall NBFI financing granted in 2007. The value of goods financed via leasing represented 5% of the GDP, i.e. 20 billion RON, while overall NBFI receivables amounted to 23 billion RON in 2007.

In comparison, in 2005, leasing contracts accounted for 3% of the GDP, i.e. 5 billion RON. In October last year, Emilian Antonescu, deputy manager of the Regulatory and Authorisation Department, expected to see the NBFI financing market triple in 2007.

Consumer credits rank second in terms of their share in NBFI operations, far behind leasing operations, and amounted to just 1.9 billion RON in 2007.

"The dynamics of leasing financing and of non-governmental credits indicates how the two activities - leasing and bank credits, complement each other, which can be partly explained by the dependency of NBFIs on banking capital. Following a trend noticeable over the last few years, leasing companies affiliated to banks continue to hold the largest market shares of over 65%," specify NBR analysts.

Leasing companies have diversified their portfolio in terms of the type of clients and in terms of sectors of activity, after the share of real estate financing outpaced that of auto financing. "The increase in the duration of leasing contracts can affect companies due to the heavy depreciation suffered by financed goods in its first few years, which in turn, leads to an increased credit risk," say analysts of the central bank.

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