Top representatives of Romanian banks attending the CFA Romania conference and quoted by Profit.ro argued that the weak corporate lending and the low financial intermediation are caused by local firms' low bankability (negative equity) and their reliance on trade credit and regulations related to combating money laundering, final beneficiary disclosure or the ESG.

Financial intermediation in Romania decreased from 57% to 50% in the last decade, reaching the lowest level in the European Union, where the average is around 217%. Moreover, it is significantly higher in the countries of the region: Czech Republic (137%), Hungary (119%), Bulgaria (91%), and Poland (93%).

The problem is the weak bankable demand, and this cannot be solved by banks alone, said Omer Tetik, Banca Transilvania CEO. Financial education and tax reporting are needed so that companies become eligible for loans, he explained.

"We cannot lend under any conditions, we are responsible for the depositors," argued Mihalea Lupu, the executive president of UniCredit Bank Romania, who added that there is a need for the financial education of companies.

iulian@romania-insider.com

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