The financial situation of the banking sector in 2020 was marked by a rise in assets, loans, own funds, deposits of private individuals and legal entities. Also, the banking sector possessed a high level of liquidity. According to the National Bank of Moldova, the quality of the loan portfolio improved compared with the end of last year, while the profit made in 2020 declined compared with the similar period of 2019, IPN reports.
At the end of last December, the loans came to 103.9 billion lei, growing by 14.6% in the course of 2020. In the structure of assets, the loans and advances at amortized cost represented 43.2% (44.9 billion lei). Banks’ investments in state securities and National Bank certificates constituted 17.6%, while the central bank’s assets made up 21.7%. The other assets, which represented 17.5%, are maintained by banks in other banks in cash, immobilizations, etc.
The gross (prudential) balance of loans constituted 43.9% of all the assets or 45.6 billion lei, rising by 13.1% last year. The volume of new loans provided in 2020 diminished by 185.4% compared with the corresponding period a year before.
The nonperforming (substandard, doubtful and compromised) loans in the period represented 7.4% of all the loans, decreasing by 1.1 percentage points. The given indicator varies from 3.6% to 16.6%, depending on the bank.
The balance of deposits continued to rise. According to prudential reports, these grew by 11.3 billion lei or 16.5% last year, coming to 79.6 billion lei. The deposits of private individuals represented 63.7% of the total deposits, of legal entities – 36.1%, while of banks – 0.2%. The biggest impact on the rise in the balance of deposits was produced by the increase in deposits of legal entities by 6.1 billion lei (26.8%) to 28.7 billion lei, and of private individuals – by 5.2 billion lei (11.3%) to 50.8 billion lei.
On December 31, the profit of the banking system came to 1.65 billion lei, declining by 27% (0.6bn lei) compared with the corresponding period a year before. The decline in profit is primarily due to the increase by 27% (1bn lei) in costs that are not related to interest, principally following the depreciation of financial assets. The interest costs decreased by 5.7% following the decline in the average rate on deposits in national currency from 4.88% on December 31, 2019 to 3.96% on December 31, 2020 and, respectively, in foreign currency from 1.02% to 0.72%.
Eleven banks licensed by the National Bank worked in Moldova at the end of last year. The commercial bank “Energbank” SA was placed under an early intervention regime on January 11, 2019 after it was determined that a group of persons acted concertedly and purchased a qualified 52.55% holding in the bank’s share capital without the preliminary written consent of the central bank. Also then, a part of the bank’s managers were replaced by temporary administrators designated by the National Bank of Moldova.
