Asociaţia Societăţilor Financiare - ALB România
The Financial Companies Association – ALB Romania
8th ALB National Conference
Evolution of the consumer credit in Romania
Bucharest, November 15th, 2012
The European market accounts for 24% of the global market
Consumer Credit Outstanding per Region at the end of 2011
Sources: central banks, Asteres estimates
The global outstanding reached 5,597 billion € at the end of 2011, +4.5% compared with the end 2010
39% of the global outstanding is in North America: United States (32%), Canada (6%), Mexico (>1%)
Asia and the Middle East represents the second group with 29% of the global outstanding
Europe incl. Turkey and Russia is the third one with 1314 billion €, or 24% of the global outstanding
Contrasting dynamics by regions
Evolution 2011/2010 of Consumer Credit Outstanding per Region (%)
Sources: Asteres estimates
 The overall increase of the global market (+4.5%) demonstrates a certain amount of momentum
 However, this increase conceals a decoupling between emerging markets, with brisk growth, and developed
markets (except North America) which are struggling or even in decline
o South America achieved the highest growth
o Asia and the Middle East (including Japan) posted a growth of 5%, but slowed down by Japan, the first market of the
region. Excluding Japan, the growth of this region was 16%
o The markets in North America and in Europe have reached maturity and present more moderate growth
 The market picked up in North America (+3.9% in 2011 following a fall of -1.7% in 2010)
 In Europe (+1.3%) the market was driven by emerging economies, outside EU, with growth of +41% in
Russia and +34% in Turkey while the EU27 saw a fall of -2.9%
EU27 : the consumer credit outstanding unequally distributed
Consumer Credit Outstanding at the end of 2011 (EU27)
Romania : Outstanding 14,6 billion€ = 1,4% of EU27
Sources: central banks, Asteres estimates
The markets are unequally distributed: the top 5 markets account for 75% of the total, while representing 63%
of the population
The European market can be split into 3 main groups :
Northern Europe: 56% of the outstanding (41% of population )
Southern Europe: 37% of the outstanding (39% of population)
Eastern Europe : 7% of the outstanding (20% of population)
EU27: for the 2nd consecutive year the consumer credit
outstanding dropped by 2.9% in 2011
 This was due to the degradation of the European financial and economic
o Low consumption in most of the countries (weak GDP growth, austerity
measures in some countries)
o High unemployment rate ( limiting access to the credit)
 Only 7 out of 27countries posted a growth of the outstanding in 2011
 Excluding Slovakia, all Central & Eastern countries fell
 Romania was also adversely affected in 2011 : - 3.5%
Sources: central banks, Asteres estimates5
A clear link between the consumer credit growth and the GDP growth
Growth of the consumer credit outstanding versus of the GDP growth (2011/2010)
3 countries showing a decrease in outstanding: Romania (-3.5% yoy), Poland (-2.7% yoy) and Bulgaria (-2,2%yoy)
Some of the emerging countries have their credit consumer markets growing fast : Argentina (+50% yoy),
Brazil(+20% yoy), Turkey (+32% yoy) and Russia (41% yoy)
Credit to individuals (consumer and mortgage) compared to GDP
Total credit outstanding to individuals ( consumer and mortgage) related to GDP in 2011
The total households indebtedness (consumer and mortgage) compared to GDP is low in Romania (17%)
Romania is among the countries with the lowest share of mortgage credit in total credit (35%). However it
increased compared to 2010 , when it was 31%
Romania : high consumer credit penetration in % of GDP
Consumer credit outstanding divided by GDP (2011)
Consumer credit penetration is important in Romania : 10.7% of GDP at the end of 2011
o However, it is decreasing from the 12.6% of GDP at the end of 2010
Average outstanding per inhabitant in Romania in 2011: 671€ (also decreasing from 704 € in 2010)
A Romanian market particularly hit by the crisis in
2009, recovering progressively
Consumer Credit Outstanding (banks + IFN) - June 2012:
 65.2 bn. RON, decreasing for the fourth consecutive year:
2012/2011 (June
 A small market at the European -8.00%
level: 1.4% of the outstanding
 but important in the Central &
Eastern region (#2 after Poland)
 One of the most shaken markets:
A very fast growth before the crisis: +82% and +34% in outstanding 2007/2006 and 2008/20067)
Then a significant drop in 2009: -60% in production
Slow recovery in 2010 (+10%) and in 2011 (+10%) in 2011
 We expect the consumer credit production to recover the 2008 level only in 2013 or 2014
IFN results: New credit granted by Product Type
Consumer credit for
personal consumption /
Credite destinate
consumului personal
Credits for Vehicles /
Credite auto
EUR 225.87
Industrial Credit/ Credite
IFN results: New credit granted for Personal Consumption
 Gradual recovery in terms of new credit granted for personal consumption in S1-2012: +3.7% vs. S1-2011 :
o Revolving loans including credit cards: +18% S1-2012/S1-2011
o Direct personal loans: +4% S1-2012/S1-2011
o Credit at POS: -19% S1-2012/S1-2011
Credit at Point of Sale
EUR 206.51
Direct Personal Loans
Revolving credit
including credit cards
Credit Risk Evolution
 Globally, the cost of risk (coming from new provisions) of the Consumer Credit companies increased strongly
in 2009, and decreased in 2010 and 2011, thanks to a renewed approach both on lenders and consumers sides.
 Banking sector :
o The rate of non-performing loans has increased from
11.9% of total loans in Dec. 2010 to 14.3% in Dec.
2011 finally reaching 16.8% in June 2012 (aggregate
level: corporate + individuals loans)
o But this is a stock: it increases because the nonperforming loans remain a long time in the books. Only
the flux (new non performing loans) trigger new
Sources: National Bank of Romania
 The weight of the foreign currency loans is very important, representing a threat for the households’ financial
health (% of foreign currency loans among total consumer credit outstanding):
o 30% in Dec. 2006  48 % in Dec. 2008  56 % in Dec. 2010  57% in Jun. 2012
 After the difficult 2009-2010 period, the Romanian consumer credit market is progressively
recovering :
o In terms of volumes – but this will need time
o In terms of credit risk : we believe the non performing loans will reach the peak in 2012, followed
by a better trend starting with 2013
 The regulatory environment is changing fast
o Globally in a good direction: favoring transparency (ex : OUG 50 ) and responsibility of consumers
and lenders (new NBR Regulation - foreign currency loans)
o New regulations expected, especially from the EU (i.e. Shadow banking)
 The approach of the lenders has been reviewed during the crisis.
o Processes (incl. granting rules)
o Transparency (ex : costs)
 ALB Code of Conduct in place
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