sergiu cioclea business week 2018... · russia croatia bosnia and herzegovina ukraine lithuania...

THE GREEN

SHOOTS OF

RECOVERY

SERGIU CIOCLEAGOVERNOR OF THE NATIONAL BANK OF

MOLDOVA

# G R O W I N M O L D O V A

ECONOMIC

UPTURN

# G R O W I N M O L D O V A MaksimChumash

3

S U S T A I N E D E C O N O M I C G R O W T H

4.8%

-0.4%

4.3%4.5% 4.5%

-1%

0%

1%

2%

3%

4%

5%

6%

2014 2015 2016 2017 2018 H1

GDP growth

1.6%

1.7%

2.8%

3.2%

3.5%

3.5%

3.5%

3.6%

3.7%

3.7%

3.9%

4.0%

4.0%

4.0%

4.0%

4.0%

4.4%

4.5%

4.5%

5.5%

6.0%

FYR Macedonia

Russia

Croatia

Bosnia and Herzegovina

Ukraine

Lithuania

Turkey

Bulgaria

Latvia

Estonia

Slovak Republic

Serbia

Belarus

Albania

Hungary

Romania

Poland

Moldova

Slovenia

Georgia

Armenia

GDP growth by countries, 2018 Forecast

Source: IMF data

Ministry of Economy and Infrastructure of Moldova

4

P R U D E N T F I S C A L P O L I C Y

-1.5%

-1.9%

-1.6%

-0.8%

1.1%

-3%

-2%

-2%

-1%

-1%

0%

1%

1%

2%

2014 2015 2016 2017 2018 H1

National Public Budget deficit to GDP

2.9%

2.6%

1.6%

0.9%

0.8%

0.8%

0.5%

0.0%

-0.3%

-0.5%

-0.8%

-0.9%

-1.0%

-1.0%

-1.4%

-1.5%

-1.5%

-1.6%

-1.7%

-2.0%

-2.0%

-2.0%

-2.7%

-2.9%

-3.2%

-5.6%

BelarusBosnia and Herzegovina

Czech RepublicBulgaria

SerbiaCroatia

LithuaniaSloveniaEstonia

LatviaMoldovaKosovo

Slovak RepublicEuropean Union

UkraineRussiaTurkey

AzerbaijanPoland

HungaryAlbania

MontenegroMacedonia, FYR

RomaniaGeorgiaArmenia

General government deficit to GDPby countries, 2017

Source: tradingeconomics.com

5

M O D E R A T E I N D E B T E D N E S S R A T I O S

14%

35%

48%

53%

53%

63%

68%

71%

73%

73%

75%

76%

77%

85%

85%

86%

88%

90%

104%

127%

141%

166%

34%

Kosovo

Russia

Albania

Romania

Turkey


Bulgaria

Macedonia, FYR

Moldova*

Poland

Belarus

Serbia

Czech Republic

Slovak Republic

Lithuania

Estonia

Hungary

Croatia

Slovenia

Ukraine

Latvia

Montenegro

External Debt to GDPby countries, 2017

Source: IMF data

* NBM/NBS data, new GDP used

81%

93% 91%

73% 72%

25% 27%38% 34% 31%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2014 2015 2016 2017 2018 H1

External Debt to GDP Governement debt to GDP


RESTORED

FINANCIAL

CONDITIONS


I N F L A T I O N

7

4.7%

13.6%

2.4%

7.3%

1.2%

14.6%

4.5%

5.5%

3.0%

0%1%2%3%4%5%6%7%8%9%

10%11%12%13%14%15%

Jan

20

14

Ap

r 2

01

4

Ju

l 20

14

Oct

20

14

Jan

20

15

Ap

r 2

01

5

Ju

l 20

15

Oct

20

15

Jan

20

16

Ap

r 2

01

6

Ju

l 20

16

Oct

20

16

Jan

20

17

Ap

r 2

01

7

Ju

l 20

17

Oct

20

17

Jan

20

18

Ap

r 2

01

8

Ju

l 20

18

Oct

20

18

Annual InflationCore inflationInflation target

1.2%

1.5%

1.7%

1.8%

1.9%

2.2%

2.2%

2.20%

2.3%

2.5%

2.8%

2.9%

3.2%

3.5%

3.7%

3.8%

4.3%

4.4%

4.9%

9.5%

Moldova

FYR Macedonia

Bosnia and Herzegovina*

Poland

Albania

Slovenia

Serbia

Euro Area

Georgia

Slovak Republic

Armenia

Lithuania

Latvia

Russia

Bulgaria

Hungary

Romania

Estonia

Belarus

Ukraine

Inflation by countries, Oct 2018 (*Sept 2018)


M O N E T A R Y P O L I C Y

8

3.5% 4.5%

19.5%

9.0%

7.0%

6.5%

0%

5%

10%

15%

20%

25%

Jan 2

014

Apr

2014

Jul 201

4

Oct 2014

Jan 2

015

Apr

2015

Jul 201

5

Oct 2015

Jan 2

016

Apr

2016

Jul 201

6

Oct 2016

Jan 2

017

Apr

2017

Jul 201

7

Oct 2

017

Jan 2

018

Apr

2018

Jul 201

8

Oct 2018

NBM Base Rate evolution

0.0%

0.9%

1.0%

1.5%

1.8%

2.5%

2.5%

2.8%

3.0%

3.7%

6.5%

7.0%

7.5%

10.0%

18.0%

24.0%

Euro Area

Hungary*

Albania**

Poland**

Czech Republic

Croatia

Romania**

Macedonia

Serbia


Moldova

Georgia

Russia

Belarus

Ukraine**

Turkey**

Central Bank Rates by countries, Oct 2018 (*Sep 2018, **Nov 2018)


F I N A N C I A L M A R K E T S

9

7.0%6.3%

9.0%

26.5%

6.0%4.7%

5.0% 5.3%6.0% 5.5%

4.2%

0%

5%

10%

15%

20%

25%

30%

Ja

n 2

014

Ap

r 2014

Ju

l 201

4

Oct 2014

Ja

n 2

01

5

Ap

r 2

015

Ju

l 201

5

Oct 2015

Ja

n 2

016

Ap

r 2016

Ju

l 201

6

Oct 2016

Ja

n 2

017

Ap

r 2017

Ju

l 201

7

Oct 2017

Ja

n 2

018

Ap

r 2018

Ju

l 201

8

Oct 2018

State Bonds, 5Y Government Bonds, 1Y Treasury Bills, 91d

Lowest

Highest

-1%

4%

9%

14%

19%

24%

Turk

ey

Ukra

ine

Russia

Georg

ia

Mold

ova

Bela

rus

Rom

ania

Macedon

ia

Alb

ania

Pola

nd

Czech R

ep.

Hunga

ry

Cro

atia

Bulg

aria

EU

are

a

Yields by countriesNov-2018*

1Y

5Y

Source: Bloomberg,

*Nov-2018 or the rate at the latest issue

EXCHANGE RATE VARIAT ION VS USD

10

MDL; 15.2%

UAH; -4.2%

GEL; -0.9%

RON; 5.7%

BGN; 8.7%

BYN; -7.2%

RUB; -8.0%

EUR/USD; -8.3%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0% J

an 2

017

Feb

2017

Mar

2017

Apr

2017

May 2

017

Ju

n 2

01

7

Jul 2017

Aug

2017

Sep

2017

Oct

2017

Nov 2

017

Dec 2

017

Jan 2

018

Feb

2018

Mar

2018

Apr

2018

May 2

018

Jun 2

018

Jul 2018

Aug

2018

Sep

2018

Oct

2018

Nov 2

018

EXCHANGE RATE VARIATION VS EUR

11

MDL; 8.5%

UAH; -11.6%

GEL; -8.6%

RON; -2.8%

BGN; -0.1%

BYN; -17.6%

RUB; -17.1%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Jan 2

017

Feb

2017

Mar

2017

Apr

2017

May 2

017

Jun 2

017

Jul 2017

Aug

2017

Sep

2017

Oct

2017

Nov 2

017

Dec 2

017

Ja

n 2

01

8

Feb

2018

Mar

2018

Apr

2018

May 2

018

Jun 2

018

Jul 2018

Aug

2018

Sep

2018

Oct

2018

Nov 2

018

INTERNATIONAL RESERVES

12

0.14

0.73

1.60

2.23

3.10

3.27

4.97

5.67

6.22

7.42

8.78

10.36

Slovenia

Slovak Republic

Lithuania

Belarus

Latvia

Ukraine

Serbia

Romania

Moldova


Bulgaria

Czech Republic

Reserves in months of imports, months, 2018 Forecast


1,747

3,011

500

1,000

1,500

2,000

2,500

3,000

3,500

Ja

n 2

01

5

Apr

2015

Jul 2015

Oct

2015

Jan 2

016

Apr

2016

Jul 2016

Oct

2016

Jan 2

017

Apr

2017

Jul 2017

Oct

2017

Jan 2

018

Apr

2018

Jul 2018

Oct

2018

International reserves (mil. USD)

CONFIDENCE IN NATIONAL CURRENCY

13

42%

59%

56%

62%

40%

45%

50%

55%

60%

65%

Dec 2

014

Mar

2015

Jun 2

015

Sep

2015

Dec 2

015

Mar

2016

Jun 2

016

Sep

2016

Dec 2

016

Mar

2017

Jun 2

017

Sep

2017

Dec 2

017

Mar

2018

Jun 2

018

Deposits

MDL

57.2%

47.1%

44.0%

34.0%

32.0%

21.9%

0% 20% 40% 60%

Moldova

Albania

Romania

Georgia

Serbia

Turkey

Share of domestic currency deposits, 2017

Source: Annual Reports of Central Banks

Loans

MDL


CONSOLIDATED

BANKING

SECTOR


STRONG BANKING CAPITALIZATION

27.7%

23.2%

22.6%

22.1%

21.6%

20.0%

19.1%

19.0%

18.8%

18.6%

18.5%

18.1%

16.9%

16.6%

16.1%

16.0%

15.7%

15.7%

12.1%

0% 10% 20% 30%

Moldova

Armenia

Georgia

Slovenia

Poland

Romania

FYR Macedonia

Russia

Croatia


Ukraine

Lithuania

Turkey

Bulgaria

Latvia

Slovak Republic

Serbia

Belarus

Albania

Capital Adequacy RatioDec. 2017, MD as of Oct-2018

11.7%10.0%

16.3%18.4%

14.7%13.3%

13.9%

26.3%

30.3% 31.0%

33.9%

27.7%

0%

10%

20%

30%

40%

20

14

20

15

20

16

20

17

Jun 2

018

Oct

20

18

Nonperforming Loans Ratio Capital Adequacy Ratio

Source: https://www.ceicdata.comNote: BASEL III capital standards starting from Jul-201810

New calculation

based on Basel III

methodology

G R O W I N G D E P O S I T B A S E ( M D L )

16

Individuals

Legal persons

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000 J

an 2

014

Apr

2014

Jul 2014

Oct

2014

Jan 2

015

Apr

2015

Jul 2015

Oct

2015

Jan 2

016

Apr

2016

Jul 2016

Oct

2016

Jan 2

017

Apr

2017

Jul 2017

Oct

2017

Jan 2

018

Apr

2018

Jul 2018

Note: Data for the system, without BEM, Banca Socială and Unibank

mil. MDL

+54%

Maximum

D E C R E A S I N G I N T E R E S T R A T E S O N M D L L O A N S

12.1

10.6

16.0

11.79.7

9.0

12.812.0

16.9

11.8

9.3

7.9

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

Ja

n 2

01

4

Ap

r 2

01

4

Ju

l 20

14

Oct 2

01

4

Ja

n 2

01

5

Ap

r 2

01

5

Ju

l 20

15

Oct 2

01

5

Ja

n 2

01

6

Ap

r 2

01

6

Ju

l 20

16

Oct 2

01

6

Ja

n 2

01

7

Ap

r 2

01

7

Ju

l 20

17

Oct 2

01

7

Ja

n 2

01

8

Ap

r 2

01

8

Ju

l 20

18

Oct 2

01

8

Corporates Individuals

Minimum

%

17

CREDIT ACTIV ITY RECOVERY

18

26.6%25.6%

26.3%

35.3%33.6%

32.3%

7.4% 8.0%9.6%

12.4%14.0% 14.4%

5.7% 6.1% 6.6%7.9%

9.3%10.3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2014 2015 2016 2017 Jun 2018 Oct 2018

Credit portfolio structure

SMEs

Consumer

loans

Mortgage loans

32.1

34.9

22

24

26

28

30

32

34

36

Jan 2

017

Feb

2017

Mar

2017

Apr

2017

May 2

017

Jun 2

017

Jul 2017

Aug

2017

Sep

2017

Oct

2017

Nov 2

017

Dec 2

017

Jan 2

018

Feb

2018

Mar

2018

Apr

2018

Ma

y 2

01

8

Jun 2

018

Jul 2018

Aug

2018

Sep

2018

Oct

2018

Credit evolution, bln. MDL

M O L D O V A N C O M M E R C I A L B A N K S

19

Market

share

Assets

million MDL

Deposits

million MDL

Loans

million MDL

Inspections

Full Affiliated

parties

MOLDOVA-AGROINDBANK 27% 22,166.1 17,369.3 11,186.5

MOLDINDCONBANK 19% 15,347.1 12,080.5 6,533.3

VICTORIABANK 19% 15,041.6 12,405.0 3,634.1

MOBIASBANCĂ 13% 10,370.4 7,802.6 4,904.1

EXIMBANK 6% 4,445.8 3,059.7 759,2

PROCREDIT BANK 4% 3,264.6 1,545.8 2,084.5

FINCOMBANK 4% 3,005.3 2,257.1 1,410.9

ENERGBANK 3% 2,643.6 1,900.5 943,9

BCR CHIȘINĂU 2% 1,784.2 982.4 668.0

COMERȚBANK2% 1,394.8 947.5 600.3

EUROCREDITBANK 1% 901.4 580.6 421.2

- New investors in 2018

BANKING SECTOR OWNERSHIP

20

26%

71%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2016 2018 H1

Foreign-owned banks market share

Source: Annual Reports of Central Banks

26%

29%

31%

71%

77%

77%

86%

Moldova (2016)

Russia

Ucraine

Moldova (2018)

Bulgaria

Romania

Georgia

Market share of foreign-owned banks, 2017

TIME TO INVEST

1, BD GRIGORE VIERU, MD-2005CHISINAU, REPUBLICA MOLDOVAWWW.BNM.MD

PHONE: +373 22 822 606EMAIL: [email protected]

sergiu cioclea business week 2018... · russia croatia bosnia and herzegovina ukraine lithuania...

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