Isărescu: Network costs will be overwhelming unless banks finance companies and SMEs
Banks need to attach more importance to the corporate
sector and to SMEs, because if they continue to rely only on
lending to the population, they will not be able to grow and to
cover the overwhelming costs of territorial networks, according to
NBR (National Bank of Romania) governor Mugur Isărescu.
"Lending to the population cannot see a very fast rise anymore. A
commercial bank that still largely relies on loans granted to the
population, as it has in the past, will face a very tough reality
check. In none of the scenarios will lending to the population see
a very fast rise anymore. If banks will rely only on that, they
will not be able to grow. They will not be able to justify their
networks. At a certain point the costs of keeping a big network
going will become overwhelming and they will not be able to cover
them."
The volume of private loans granted by banks fell by 3% last year
in real terms, but climbed 4.7% in nominal terms, to 209.3 billion
RON.
Big banks refrained from makings significant network and personnel
cuts, with the words "restructuring" and "layoffs" not often to be
found in connection to the banking industry after two years of
crisis.