Over 50% of the Romanian financial sector's exposures are to companies that are “at climate change risk” and 25.4% of total non-government credits finance polluting businesses, Florian Neagu, deputy director of the National Bank of Romania (BNR) and coordinator of the National Committee for Macroprudential Surveillance (CNSM) working group set up to support green financing, told Economica.net.
Only 3% of the bank assets (about RON5bn or €1bn) are green loans, more precisely loans extended by banks for projects aimed at reducing debtors’ exposure to climate change, he added.
The figures are as of the end of 2020 and the RON1.25bn loan extended by BRD Societe Generale to hydropower company Hidroelectrica has improved the figures a bit, he admitted.
The CNSM study shows that, on average, each bank is exposed by at least 10% to credited companies that are “brown”, and the top five banks in the system have accumulated a total risk of 55% of assets. Agricultural firms are the most exposed.
BNR has developed a framework for monitoring economic sectors that may be affected by climate (transitional) risk and their importance to the banking sector, using the information collected at a sectoral level, combined with individual data on bank exposures. Each Romanian bank has a minimum exposure of 10% of assets on companies that may be severely affected by climate risk.