The appetite for consumer loans slaked toward the end of last year. In December, the volume of consumer finance advanced by only 1.4%, compared with monthly paces of almost 10% seen at the middle of the year. Under the circumstances, at the end of 2006 consumer lending totalled 30.37 billion RON (8.98 billion euros), 94% higher than the level reached in December 2005. In 2005, consumer lending even doubled in nominal terms.
The slowdown registered in the last month of 2006 came about in the context where RON financing almost stalled at 21.4 billion RON, the advance against November standing at only 0.7%, despite banks' winter promotions. On the other hand, the need for cash for winter holidays was largely covered by salary raises and bonuses granted by employers.
Nevertheless, foreign currency lending climbed by 3%, to 9 billion RON (2.6 billion euros).
Overall, the appetite for RON financing fell considerably in the second half of last year, with the monthly growth pace slowing down to almost zero, after having exceeded 10% in May. Demand for foreign currency financing also got considerably lower, with monthly increases going down from almost 10% in June to less than 3% in November.
Population's lending demand shrank a great deal during the last months of 2006, with the trend being visible particularly on the segment of mortgage lending. NBR's monetary policy tightening in June last year had quite rapid effects as banks started paying better interests for deposits, but also raising the cost of lending. Thus, during the last few months of 2006 individual customers started switching to savings. Though the monthly expansion pace of consumer lending slowed down considerably during the last few months of 2006, the annualised growth pace was speedier.
The annualised growth of consumer lending accelerated from 89% to 93% in December. The m
