Top 5 banks take steps to ease lending rates

The financial package arrangement, concluded with major international financial institutions has made lenders adjust their lending rates, as the bankers heralded few weeks earlier.
After Banca Transilvania had cut the interest rates for loans in lei destined for natural persons by 1-2 basis points, down to 15% - 15.5% per year, another Top5 bank, Raiffeisen Bank, chopped lending rates for new loans.

Thus, interest rates for loans in lei and euro dropped by 3-4%, Raiffeisen Bank said.

“The rescue package agreement concluded last week with international institutions (IMF, EC, EBRD,WB), has already an effect on the risk approach to Romania. The next move would be the reduction of external financing costs which can lead to lower lending costs,” said Razvan Munteanu, vice president of Raiffeisen Bank’s retail division.

The market will not come back to 2007-2008 lending flurry of over 40%, the banker expecting an increase in lending activity at an annual 10-15% pace.

Raiffeisen Bank holds a 500 retail units network with over 1,000 ATM chain and 8,000 EPOS. At the end of 2008, the bank had 2 million clients at its retail services (100,000 of which being small businesses) and over 4,000 large and medium corporations.

Banca Transilvania reduced by 2 basis points the interest rates for loans in lei, the CEO of the bank, Robert Rekkers saying he expects a market-wide adjustment.

Garanti Bank, a small sized lender in the local landscape said it would reduce by 3 bp the interest rates for various type of loans destined to persons, in lei, euro, dollar or Swiss francs, in a bid to support the borrowing needs of its clients.

Thus, the real estate loans in lei, euro, US dollars and Swiss francs mature in 30 years are charged at 9.96% interest rate (annual percentage rate - ARP standing at 12.03% for a 300,000 euro loan for 30 years).

Banca Romaneasca has recently cut interests for mortgage and real estate loans in euro, US dollars, Swiss francs or Japanese yens, but increased interests for loans in national currency adjusting them to the evolution of ROBOR, EURIBOR, LIBOR.

Loans in lei account for less than 5% of the bank’s mortgage loan portfolio.

BRD, the second largest player in the local banking market hopes the IMF arrangement would trigger a reduction of interest rates for loans in lei down to an annual 10-12%, by cutting the reserve requirements, said the CEO of BRD-Groupe Societe Generale, Patrick Gelin.

Less than 50% of the loans granted by BRD are in foreign currency, in contrast with the market median of 57%, which makes BRD a “prudent bank”, said the CEO of the bank.

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