The liquidity in the local banking system is huge as the ratio between credits and deposits became fell below one for the first time in recent years and the banks are losing money because they have too much liquidity, said Omer Tetik, general manager of Banca Transilvania, the third largest lender in Romania.

“The banking system in Romania is going through a difficult period, clients have changed, they are more informed, the demand is much lower and we are talking about a huge liquidity in the market which is not yet allotted to the real economy,” Tetik said in a press conference.

He added that the competition between local banks will be stronger next year, as they will have to find ways to profitably place their liquidity.

The total loans granted by local banks to private companies and individuals were EUR 48.4 billion at the end of July 2014, down by 3.4% compared to July 2013. At the same time, total deposits made by private companies and individuals were EUR 48.5 billion, up by 6.9% year-on-year, statistics from Romania’s National Bank (BNR) show.

editor@romania-insider.com