Head of VB Leasing: Leu�s downslide will lead to cost increase to end-user

Peter Demmer, head of VB Leasing Romania, that granted 90 million euros loans and sealed nearly 5,000 new contracts in first half this year, says the meltdown of the national currency will lead to cost increase to end-user.

“Drop of national currency will not trigger any major changes in company’s profit margins. It is natural that together with international financial problems, refunding costs have started to rise, and these changes will lead, in the end, to a cost increase to end-user”, said Peter Demmer, managing director of the company.

According to Demmer, currency exchange rate of leu against euro is not alarming, at least not up to now, explaining that Romanian economy has managed to overcome a similar phase and will succeed in coping with the turmoil once again, due to high potential of the market. “We are convinced that on a medium and long term, the situation will improve, the national currency is on upside path again, and Romania will cope better with the global financial crisis better than other states,” Demmer pointed out.

In first half this year, VB Leasing sealed 5,000 new contracts, and up to yearend the company estimates it will exceed 11,000.

“Few months ago, probably nobody foresaw any widespread economic crisis to reach Romania. Lawmakers must make efforts to cushion Romania from international gloomy events”, Demmer added.

Furthermore, considering that Romanian economy is not among the most powerful economies in the world, currency exchange rate sways may emerge at certain intervals, Demmer said. “They are not caused exclusively by lack of investments or by high costs of refunding,” VB Leasing manager said.

All financial institutions will have to raise installments and other costs as well. “Products that we provide are based on euro, this being the reason why the company is not directly affected by installment growth. Indirectly, this growth is likely to lead to a lower volume of contracts, as eventually, the end-user is the one that feels the final cost of the goods,” he explained.

“In case of ongoing slump of national currency, certain clients may experience liquidity shortages. We try to protect our clients from these problems, and to find solutions, in our effort to maintain long-term partnerships”, Demmer
added.

VB Leasing holds a 12-units chain, together with Head Office located in Bucharest, and by yearend, the company aims at opening three more branches.

VB Leasing Romania is subsidiary of VB Leasing International, member of Austrian-based Österrechische Volkbanken AG that holds 80% stake while Volksbank Romania owns 20% stake.

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