The National Bank of Moldova will pay special attention to assessing credit risks in the process of banking supervision and calls on banks to adhere to the highest lending standards
As noted by the National Bank, in the context of external risks that have persisted for several years, in particular geopolitical risks, problems associated with the energy crisis, and problems directly related to the economies of trading partner countries, credit risk will remain an area of increased attention for the NBM in the supervision process in 2025-2026. The National Bank recalled that the quality of the loan portfolio has a direct impact on the capital of banks, since it determines the level of reserves required to cover losses on unfavorable loans. Given the possible consequences of the energy crisis, the solvency of some borrowers may suffer and lead to cases of default on financial obligations to creditors, which may lead to a deterioration in the quality of banks' assets. As noted by the National Bank, at the same time, the NBM and banks have long been pursuing a policy of strengthening their own funds, that is, the potential negative impact of these loans can be absorbed. Supervisory authorities will continue to assess banks' lending policies under the SREP to ensure that they remain sound and in line with applicable regulations and the risk profile, and that risks are properly identified and managed. According to the NBM, lending volumes increased in the first 11 months of 2024. Thus, the loan portfolio increased by 21.9% to 77 billion 875.8 million lei, mainly due to the increase in loans to individuals. It should be noted that these loans increased by about 4 times compared to the same period in 2023. In the context of lending recovery, the NBM will continue to ensure healthy and sustainable lending conditions through prudent regulation, monitoring and intervention, if necessary. The NBM emphasizes that for the lending recovery to be sustainable and profitable, it is essential for banks to adhere to the highest lending standards. This will ensure not only economic growth, but also long-term financial stability. In addition, the on-site assessment will include a review of the adequacy and reliability of loan classification and provisioning practices (including for retail loans) to ensure timely identification of potential financial problems. Particular attention will be paid to assessing lending and monitoring procedures, the dynamics of different credit products taking into account banks’ risk appetite, and the recovery of loans, especially consumer loans, which are mostly issued without collateral. // 24.01.2025 — InfoMarket.
